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Last reviewed: 20 April 2026 Jurisdiction: Queensland, Australia Important: This guide provides general information only and is not legal advice. Legislative references in this guide are to the Building Industry Fairness (Security of Payment) Act 2017 (Qld) unless otherwise stated. Because QBCC forms, registry practices, and case law can change, critical steps — especially service, time limits, approved forms, and enforcement — should always be checked against the current legislation, current QBCC material, and current authorities. Key Takeaways Adjudication under Queensland's Building Industry Fairness (Security of Payment) Act 2017 (Qld) is a fast, statutory process for resolving construction payment disputes in Queensland, built around strict deadlines and procedural compliance. It is one of the most effective tools available to recover payment for construction work, related goods, and services. A payment claim must be validly made and validly served. If it is materially defective, the adjudication pathway may fail at the threshold. Service of every critical document — the payment claim, the payment schedule, the adjudication application, the adjudication response, any warning notice, and any notice of suspension — must comply with the contractual and statutory requirements. A failure of service at any stage can invalidate the step taken and may expose any resulting determination to challenge. A respondent’s payment schedule is critical. A late, materially inadequate, or missing schedule can have severe consequences, including immediate liability exposure and major restrictions in adjudication. Adjudication is all about “pay now, argue later.” It creates an interim binding payment outcome, not a final determination of all contractual rights. The adjudication application process is deadline-sensitive and form-sensitive. Miscalculating the time to apply or failing to use and serve the approved form and accompanying material in accordance with the Act, can be fatal. There is no general merits appeal from an adjudicator's decision. The challenge pathway is narrow, high-threshold, and expensive — confined principally to judicial review or related supervisory relief for jurisdictional error, such as the adjudicator going beyond power, denying natural justice, failing to consider matters the Act requires, or proceeding without a valid jurisdictional precondition. Contents Adjudication Timeline at a Glance Understanding Adjudication in Queensland When Does the BIF Act Apply? The Critical Link to QBCC Licensing Due Dates for Payment: The Hidden Trigger That Controls Everything Stage 1: The Payment Claim Service Rules: The Procedural Trap That Can Void the Entire Process Stage 2: The Payment Schedule (The Response) Stage 3: The Adjudication Application Stage 4: The Adjudication Response Standard Claims and Complex Claims: Why the Distinction Matters Stage 5: The Adjudicator's Decision How Construction Work Is Valued in Adjudication Retention and Part 4A of the QBCC Act Stage 6: After the Decision: Payment and Enforcement Court Recovery, Warning Notices, and Debt Pathways Suspending Work for Non-Payment Challenging an Adjudicator's Decision: Judicial Review Practical Closing Observations How Merlo Construction Lawyers Can Help FAQs Adjudication Timeline at a Glance A typical Queensland adjudication sequence under the Building Industry Fairness (Security of Payment) Act 2017 (BIF Act) looks like this: A valid reference date arises under the contract or, if the contract is silent, by operation of s 67 of the BIF Act. The claimant serves a payment claim on or after that reference date, complying with the identification, content, timing and service requirements of the BIF Act. The respondent serves a payment schedule within the earlier of the contractual period or 15 business days — or fails to do so. One of three adjudication triggers is enlivened: the scheduled amount is less than the claimed amount; no payment schedule is served in time; or the scheduled amount is not paid by the due date. The claimant lodges an adjudication application with the QBCC Adjudication Registrar in the approved form, within the applicable statutory period (20 or 30 business days, depending on the trigger). The respondent gives the adjudicator an adjudication response within the prescribed time — 10 business days for a standard claim, 15 for a complex claim — confined to the reasons for withholding payment already stated in the payment schedule; if no payment schedule was served, the respondent has no right to respond at all. The adjudicator decides whether they have jurisdiction, values the construction work, and determines the adjudicated amount, the date payable, and interest. The respondent pays the adjudicated amount within five business days (or such later date as the adjudicator allows), or the claimant moves to enforcement — including registration as a court judgment, suspension of work, or insolvency proceedings. In limited cases, a party seeks judicial review on jurisdictional grounds — not on the merits of the decision. That sequence sounds simple. In practice, each stage is heavily regulated, and non-compliance at any point can be fatal to a party's position. Understanding Adjudication in Queensland If you are not getting paid for construction work in Queensland — or you are facing a construction payment dispute over a progress payment, a final payment, or retention — adjudication may be the fastest route to recovering what you are owed. Adjudication is a statutory mechanism for the rapid resolution of payment disputes in Queensland's building and construction industry. Governed by the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (BIF Act), it is designed to keep money flowing through the contractual chain and reduce the commercial damage caused by delayed or disputed progress payments. At its core, adjudication is a "pay now, argue later" process. The statutory framework for payment claims, payment schedules, adjudication applications, adjudication responses, adjudication decisions, and enforcement is found principally in ch 3 of the BIF Act. The process is intentionally fast and highly structured. Rather than broad procedural flexibility, the scheme operates through strict rights, obligations, and timeframes. An adjudicator makes an interim determination about how much, if anything, the respondent must pay the claimant. The adjudicator does not finally determine every issue between the parties for all purposes. Instead, the adjudicator gives a fast statutory decision on the payment dispute as presented in the claim, schedule, application, response, and any permitted supporting material. That interim character matters. A party dissatisfied with the outcome may still litigate or arbitrate the underlying dispute later, subject to its contractual and legal rights. But unless and until that happens, the adjudicated amount is generally payable. This is why adjudication is fundamentally about cash flow rather than final determination of all rights. The legislation prioritises keeping money moving over waiting for a complete merits hearing. That is what makes adjudication effective. It is also why procedural discipline matters at every stage. A party that understands the Act, the relevant contract, and the procedural requirements can use adjudication to protect cash flow and apply immediate commercial pressure. A party that misses a deadline, serves a document defectively, or fails to articulate its position properly can lose important rights very quickly. When Does the BIF Act Apply? The adjudication regime does not apply to every building and construction contract in Queensland. The first question is always whether the contract and the work fall within the scope of the Act. Broadly, the BIF Act applies where there is a construction contract for construction work, or for related goods and services, carried out in Queensland. The key defined terms are addressed in, among other provisions, ss 10, 11, 12 and sch 2 of the BIF Act. A construction contract can be written, oral, or partly both. That matters because parties sometimes assume the statutory regime cannot apply without a formally executed contract. That assumption is dangerous. If the substance of the arrangement meets the statutory definition, the Act may apply regardless of whether the agreement was ever formally documented. Importantly, parties cannot contract out of the BIF Act's provisions. A contractual term that attempts to exclude or limit the Act's operation is generally void to the extent of the inconsistency: see s 200 of the BIF Act. Construction work is broadly defined. It includes erecting, altering, repairing, and demolishing buildings and structures; civil engineering work such as roads, bridges, and tunnels; trade work including plumbing, electrical, and mechanical; excavation and site preparation; and associated professional services including design, engineering, and project management where those services are linked to construction work. Related goods and services — including the supply of construction materials, prefabricated components, and equipment hire with an operator — can also fall within the regime. The Queensland territorial link is essential. The work or related goods and services must be sufficiently connected to Queensland for the Act to operate. Where work is partly carried out in Queensland and partly outside, the question of whether the territorial connection is sufficient should not be assumed and should be checked carefully against the facts and the current authorities. Exclusions and limitations Several categories of contract and work fall outside the BIF Act's scope: The owner-occupier residential exclusion removes from the regime most contracts between a homeowner and a builder for work on a residential property where the homeowner resides or intends to reside. However, the exclusion does not extend to subcontractors working on residential projects — builders remain obliged to comply with the Act's payment obligations to their subcontractors, even on excluded residential projects. Employment contracts are excluded. Employees whose rights are governed by employment law cannot use the BIF Act. Resources sector exclusions apply to certain drilling, mining, and petroleum operations, unless the relevant work relates to construction of associated infrastructure such as roads, buildings, or other permanent structures on the relevant site. The regime also does not apply where the consideration under the contract is non-monetary. Barter arrangements or in-kind payment structures are outside the Act. The BIF Act contains additional exclusions beyond those summarised above. The full scope of the exclusions should be checked directly against the current text of the Act where there is any doubt about whether a particular contract or category of work falls within the regime. Goods, services, and professional services The Act's application to related goods and services means that suppliers of construction materials, equipment, and associated services can be protected even where they are not performing construction work themselves. Professional service providers — including architects, engineers, surveyors, and project managers — can also fall within the regime where their services are sufficiently connected to construction work being carried out. The connection to actual construction work is the key threshold requirement. Partly oral contracts Where a contract is partly oral and partly written, the Act can still apply. The substance of the arrangement is what matters. Where parties are exchanging purchase orders, emails, and verbal instructions without a formal subcontract, the risk that the statutory regime applies is real and should be assessed. Work partly outside Queensland Where construction work is performed partly in Queensland and partly in another jurisdiction, the analysis of whether the BIF Act applies requires careful examination of where the work was primarily performed and where the relevant obligations arose. The territorial link cannot be presumed from the fact that one party is based in Queensland. Because jurisdiction is foundational, scope should never be assumed. It should be checked against the specific facts of the contract and the work, including any exclusions that may apply. The Critical Link to QBCC Licensing This is not a peripheral regulatory issue — it sits alongside the scope and exclusion questions above as a foundational eligibility matter, because it can go directly to the claimant's entitlement to payment. Under the Queensland Building and Construction Commission Act 1991 (Qld), unlicensed building work can deprive the contractor of entitlement to monetary consideration for that work. If the claimant lacks a legal entitlement to payment because of a licensing defect, adjudication cannot ordinarily be used to create that entitlement. In practical terms, that can make licensing a threshold entitlement issue, and in some matters it may also affect whether an adjudication can validly proceed. The interaction between licensing and payment entitlement can be complex, particularly where part of the work required a licence and part did not, or where the licensing defect is arguable rather than clear-cut. A claimant should check the licensing position before investing time and money in preparing a payment claim or adjudication application. If the licensing position is defective, the adjudication strategy may fail at the threshold. Do not risk your entire recovery on a preventable licensing technicality; instruct our team for a rapid QBCC compliance review to secure your commercial position before you serve your claim. Practical Risk Point Before making a payment claim, confirm: the claimant held the correct QBCC licence for the relevant work; the licence covered the relevant scope for the relevant period; and there is no obvious licensing-based defence capable of defeating entitlement at the threshold. Due Dates for Payment: The Hidden Trigger That Controls Everything The due date for payment is one of the most consequential and frequently misunderstood concepts in the BIF Act. It is not merely the date by which a respondent must pay. It is the point from which adjudication application deadlines, court recovery pathways, suspension rights, and warning notice requirements are worked out. An error in identifying the correct due date can therefore create multiple downstream problems. What is the due date for payment under the contract? The starting point is the construction contract itself. If the contract specifies when a progress payment becomes due, that contractual date generally governs, subject to the statutory overrides described below. Many contracts set due dates by reference to a fixed number of days after a payment claim is submitted, after a superintendent's assessment, or after a reference date. The contractual mechanism must be examined carefully, because what the contract says the due date is and what the Act allows the due date to be can diverge. When does the BIF Act default position apply? If the contract does not address when a progress payment becomes due, the BIF Act supplies a default. Under the Act, the default due date for a progress payment is 10 business days after the day on which the payment claim is given. That default position should be checked against ss 73 and 74 of the BIF Act and any applicable QBCC Act override. That default applies whenever the contract is silent on the matter. It is also the fallback position if the contractual payment period is found to be void. When do the QBCC Act maximum payment periods override the contract? Where the work under a construction contract constitutes building work for the purposes of the Queensland Building and Construction Commission Act 1991 (Qld) (QBCC Act), sections 67U and 67W of that Act impose maximum payment periods that override any inconsistent contractual term. Those provisions operate as follows: For a commercial building contract (that is, a head contract between a principal and head contractor): any contractual term requiring payment more than 15 business days after the payment claim is given is void. If the contractual period exceeds 15 business days, the offending provision is void and the statutory default position under the BIF Act should then be considered. For a subcontract or construction management trade contract (that is, contracts at subcontractor level): any contractual term requiring payment more than 25 business days after the payment claim is given is void. If the contractual period exceeds 25 business days, the offending provision is void and the statutory default position under the BIF Act should then be considered. The practical significance is immediate. A respondent who believes it has 30 days to pay under its subcontract may in fact have 25 business days at most — and if the subcontract is ambiguous or silent, only 10 business days. The relevant provisions are ss 67U and 67W of the QBCC Act. Where a contract was entered into before the commencement of sections 67U and 67W of the QBCC Act, the application of the maximum payment period provisions to that contract should be checked carefully against the relevant transitional provisions. Older contracts may raise additional questions about whether and when the statutory caps took effect. "Pay when paid" clauses do not ordinarily assist the respondent Contractual provisions that make a subcontractor's payment conditional on the head contractor first receiving payment from the principal — so-called "pay when paid" clauses — have no effect under the BIF Act: see s 74(1). They cannot ordinarily be relied on as a basis for withholding or deferring payment past the due date and they will not ordinarily justify non-payment in adjudication or court proceedings. Why the due date matters across the whole statutory process The due date for payment is not just a payment obligation. It is the statutory clock for almost every other right and deadline in the BIF Act. Specifically: The claimant's right to adjudicate is triggered by the respondent's failure to pay by the due date. The adjudication application deadlines under section 79 — 30 business days or 20 business days, depending on the pathway — are each calculated by reference to the due date for payment (see Stage 3: The Adjudication Application). The section 99 warning notice required before commencing court proceedings must be given no later than 30 business days after the due date for payment (see Court Recovery, Warning Notices, and Debt Pathways). The right to suspend work under section 98 also depends on non-payment by the due date (see Suspending Work for Non-Payment). A claimant who miscalculates the due date may serve its warning notice too late, lodge its adjudication application out of time, or attempt to suspend work prematurely. All of those errors can be fatal to the claimant's position. At Merlo Law, our senior counsel regularly untangle these complex statutory overrides for both head contractors and subcontractors across Queensland and NSW. We pinpoint the exact, legally binding due dates that dictate your next move, ensuring your statutory leverage is deployed with absolute precision. Common mistakes in identifying the due date The most frequent errors practitioners see in due date analysis include: accepting the contractual due date without checking whether the QBCC Act caps apply; failing to recognise that a clause providing for payment more than 15 or 25 business days after the claim is void; assuming that a "pay when paid" clause extends the due date; and failing to recalculate the due date when the claimed statutory period turns out to be void and the 10 business day default kicks in instead. Practical Risk Point Before calculating any adjudication application deadline, warning notice deadline, or suspension right, identify the correct due date for payment first. Check the contract, check whether the QBCC Act caps apply, and check whether any contractual term affecting the due date is void. Then calculate every downstream deadline from that confirmed due date. Due Date Decision Table Contract position Applicable maximum period Result if exceeded Head contract (commercial building contract) 15 business days after payment claim Contractual term is void; 10 business day default applies Subcontract or trade management contract 25 business days after payment claim Contractual term is void; 10 business day default applies Contract silent on due date N/A 10 business day statutory default applies "Pay when paid" clause N/A — has no effect in all cases: see s 74(1) 10 business day default applies Stage 1: The Payment Claim Making a payment claim under the BIF Act is the statutory trigger for the adjudication process. A payment claim in Queensland is not just a commercial invoice. It is the document that starts the formal payment regime under the BIF Act and imposes serious obligations on the respondent. If the payment claim is valid, it may trigger the respondent’s obligation to serve a payment schedule and may lay the foundation for adjudication. If it is invalid, the statutory process may fail before it truly begins. That is why payment claim preparation should be treated as a legal exercise, not just an accounts exercise. The Critical Importance of the Reference Date A payment claim cannot be validly made at any time the claimant chooses. It must be made on or after a valid reference date. A reference date is the point at which the right to claim a progress payment arises. The contract is the first place to look. If the contract identifies when claims may be made, those contractual provisions usually drive the reference date analysis. If the contract does not provide for reference dates, the BIF Act supplies a default framework. The key practical point is this: a prematurely served claim may be invalid. A claim served even one day before the relevant reference date may fail as a statutory precondition to the payment claim regime: see generally ss 70 and 75 of the BIF Act. If that happens, the respondent may not be required to serve a payment schedule, and any later adjudication application based on that claim may also fail. A claimant is limited to one payment claim per reference date: see s 75(4) of the BIF Act. That prevents repetitive or overlapping claims for the same entitlement period and reinforces the need for disciplined progress claim administration. Case law in practice Queensland authority has treated the existence of an available reference date as a foundational precondition to a valid payment claim. A claim served before the relevant reference date is premature and may be invalid, with the consequence that the statutory process — including any adjudication application built upon it — may not validly proceed. The date of service must be on or after the reference date, not merely close to it. Where a contract specifies a date for submission of progress claims, that date controls the reference date analysis for the purposes of the BIF Act, overriding any deeming provision that would otherwise move the reference date earlier. What Makes a Payment Claim Valid Under the BIF Act? A payment claim must satisfy the statutory requirements. In substance, it must satisfy s 68 of the BIF Act: identify the construction work or related goods and services to which the claim relates; state the amount claimed to be payable; request payment of that amount; and include any other information prescribed by regulation under s 68(1)(d). Each of these elements has generated dispute and deserves careful attention. Identifying the work This is one of the most litigated requirements in Queensland adjudication. The test is objective. The question is whether the payment claim gives the respondent enough information to understand what is being claimed and to decide how to respond. The required level of detail is contextual — it depends on the size and complexity of the project, the contract structure, the nature of the work, and the prior course of dealings between the parties. Queensland courts have confirmed that payment claims are not required to be as precise and particularised as court pleadings, but the description of the work claimed must be sufficient to apprise the parties of the real issues in dispute. A bare percentage claim against a large lump sum trade package that does not explain what work is being valued or why that percentage has been reached may not meet the standard. The question is not whether the claimant knows what it is claiming — it is whether the respondent can understand it well enough to formulate a substantive response. When your high-value payment claim faces aggressive scrutiny, request an urgent review from our adjudication specialists to ensure your documentation survives jurisdictional challenge. Stating the claimed amount The payment claim must state a clear and unambiguous claimed amount. Inconsistencies between a cover page figure and the supporting calculation pages, or a failure to express GST inclusive and exclusive figures clearly, can create avoidable disputes about what amount was actually claimed. The respondent must be able to identify the exact amount said to be payable without having to perform reconciliation work that the claimant should have done. Requesting payment The payment claim must amount to a request for payment. Section 68(3) of the BIF Act provides that a written document bearing the word "invoice" is taken to be a request for payment, which reduces the risk for claims structured as invoices. However, formulaic expressions such as "amount due this claim" may not, in some circumstances, amount to a sufficiently clear request for payment. The safer course is to include an express and unambiguous statement requesting payment of the claimed amount, rather than relying on implication or on standard accounting phrases that may fall short of the statutory requirement. One claim per reference date A claimant is generally limited to one payment claim per reference date. This reinforces the need for disciplined progress claim administration. Where a claimant has already served a payment claim for a given reference date, no further payment claim can be made in respect of that reference date — the claimant must wait for the next reference date to arise. Fresh claims under subsequent reference dates Although a claimant is limited to one payment claim per reference date, a claimant may serve a fresh payment claim under a subsequent reference date for the same or overlapping work. This is sometimes described as the "second bite" at the payment claim. A fresh claim under a new reference date is a new payment claim for the purposes of the BIF Act, and it triggers a new obligation on the respondent to serve a payment schedule and, if the statutory conditions are met, a new right to apply for adjudication. The interaction between a fresh payment claim and a prior adjudication determination for overlapping work can raise complex issues, including whether the adjudicator determining the later claim is bound by findings in the earlier determination, and how previously adjudicated amounts should be treated in the valuation of the later claim. These issues should be checked against the current authorities. The practical significance is that a claimant whose first payment claim fails — whether because of a validity defect, a service failure, or a missed adjudication application deadline — is not necessarily without remedy. If a subsequent reference date is available, a fresh payment claim may be served. However, the fresh claim must comply independently with all of the BIF Act's requirements, and any defect in the earlier claim does not automatically carry over as a basis for the later one. Final payment claims The timing rules for final payment claims differ from those governing progress claims. A final payment claim — being a claim relating to the final payment under the contract — must be given before the end of whichever of the following periods is the longest: the period worked out under the contract (if any); 28 days after the end of the last defects liability period under the contract; six months after the completion of all construction work under the contract; or six months after the complete supply of all related goods and services under the contract. These are longer windows, but they are not unlimited, and a final payment claim served after the longest of those periods has ended may be void. The timing rules should be checked directly against s 75 of the BIF Act when preparing any final payment claim. Contractual preconditions and the Act's override Many construction contracts include preconditions to the right to serve a payment claim — for example, requiring the claimant to provide a statutory declaration confirming subcontractors have been paid, or to produce evidence that insurance is in place. Section 200 of the BIF Act prevents parties from contracting out of the Act’s provisions. This means that even if a contract purports to impose additional preconditions on the making of a payment claim, those contractual requirements do not necessarily control the validity of a statutory payment claim under the Act. The contractual requirement may still be enforceable as a matter of contract law, but it does not necessarily invalidate the statutory payment claim if the Act's requirements are otherwise met. Case law in practice Queensland courts have repeatedly treated the identification of work requirement as a threshold jurisdictional issue. A payment claim that fails to sufficiently identify the work may be invalid, and an adjudication application built on that claim may be vulnerable to jurisdictional challenge or enforcement resistance. The question of sufficiency is assessed objectively, from the perspective of a reasonable person in the position of the respondent. Payment Claim Validity Checklist A payment claim should, at minimum, confirm: the correct parties; the correct contract; the relevant reference date; a clear description of the work or goods/services claimed; the exact claimed amount; any other information prescribed by regulation; correct date of issue; compliant service method; and service evidence retained. If any of these elements is missing or defective, the document may not qualify as a valid payment claim under the Act. If you are the claimant Treat every payment claim as a legal document, not a commercial invoice. Confirm the reference date, check your QBCC licence, identify the correct service method, and retain evidence of service. A defective claim that cannot be rescued will force you to wait for the next reference date, by which time significant time and money may have been lost. If you are unsure whether your payment claim complies with the BIF Act, obtaining advice before service is significantly cheaper than attempting to repair the position after a defect has crystallised. If you are the respondent Receiving a payment claim starts the clock immediately. Identify the payment schedule deadline the day the claim arrives. Begin preparing your schedule without delay, and resist the temptation to rely on prior correspondence as a substitute for proper reasons. If you are the principal or head contractor Understand the QBCC Act maximum payment periods that apply to your head contract and to any subcontracts under it. A contractual payment period longer than the statutory maximum is void, and a due date error flows downstream into every adjudication and court recovery deadline. Service Rules: The Procedural Trap That Can Void the Entire Process A valid payment claim must also be validly served — but service is not just a payment claim issue. Under the BIF Act, every critical document in the adjudication process — the payment claim, the payment schedule, the adjudication application, the adjudication response, any warning notice, and any notice of suspension — must be validly served. A failure to serve any one of these documents in a compliant manner can invalidate the step taken and, in the case of the adjudication application, may expose any later determination to challenge. The service principles discussed in this section apply to every critical document in the process, not only to payment claims. The hierarchy: contract first The starting point for service of any document under the BIF Act is always the construction contract. Section 102 of the BIF Act provides that a document required or permitted to be given under ch 3 is to be given in the way, if any, provided for under the relevant construction contract. If the contract specifies addresses, nominated representatives, email addresses, or project platform requirements, those provisions control. The serving party should identify and comply with the contractual service regime before relying on any statutory fallback. Acts Interpretation Act 1954 (Qld) — the fallback Where the contract is silent on service method, section 39 of the Acts Interpretation Act 1954 (Qld) applies as a fallback. That fallback should also be read with s 102 of the BIF Act and, where the respondent is a corporation, any applicable service provisions under the Corporations Act 2001 (Cth). That provision authorises service on an individual by personal delivery, or by leaving or posting the document at the person's last known place of residence or business. For a body corporate, it authorises delivery by the same means to the entity's head office, registered office, or principal office. Email is not expressly listed in s 39, and Queensland authority has left room for argument about whether email alone falls within the “similar facility” language used in that provision. That risk can usually be managed where the contract expressly authorises email service, but absent a clear contractual basis or another clear legal basis, email-only service may carry material validity risk. Corporate service issues Where a party is a company, the Corporations Act 2001 (Cth) provides additional authorised service methods, including service at the company's registered office or by post to that address. These methods are available in addition to the contractual and Acts Interpretation Act pathways. Where there is any doubt about whether service on a particular individual has been authorised, service at the registered office of the corporate entity will often be the safer approach. The platform and hyperlink risk As discussed in the payment claim service section, Queensland authority has treated service methods that merely provide a link or retrieval pathway, rather than delivering the document itself, as carrying significant risk. The same concern may arise for other BIF Act documents, not just payment claims. Service via Aconex or similar document management platforms may be effective where the contract permits it, but upload alone should not be assumed to constitute effective service in every case. Any platform-based service should be checked carefully against the contract and the current authorities. Serving the complete adjudication application Special attention is required when serving the adjudication application on the respondent. The claimant should serve a complete copy of the application, including the current approved Form S79 and all submissions and supporting documents lodged with the QBCC, so that what is served matches what was lodged for the purposes of s 79(4) of the BIF Act. In Platform Constructions Pty Ltd v Fourth Dimension Au Pty Ltd [2025] QCA 264, the Queensland Court of Appeal set aside an adjudication decision because seven files comprising the subcontract had not been sent by the claimant to the respondent as part of the adjudication application service. The documents were lodged with the QBCC but not served on the respondent. That omission was treated as fatal in that case. The lesson is clear: what was lodged and what was served must be identical. The serving party should conduct a document-by-document comparison before service occurs. At a minimum, the served package should be checked carefully to ensure it includes the same form, submissions, and attachments lodged with the QBCC for the purposes of s 79(4). Procedural slip-ups in service are the most common unforced errors we see disrupting commercial construction outcomes. Having navigated the rigid service frameworks across major QLD and NSW projects, Merlo Law provides the meticulous, straight-talking oversight required to execute flawless service and safeguard your adjudication rights. Timing of service of the adjudication application Under section 79(4) of the BIF Act, the claimant must give a copy of the adjudication application and any accompanying submissions to the respondent within 4 business days after lodging the application with the QBCC. This is a separate and independently enforceable obligation. Lodging with the QBCC on time but serving the respondent late — or incompletely — may expose any resulting determination to jurisdictional challenge. Proving service: evidence preservation Proof of service is not merely an administrative detail. In disputes about whether an adjudication determination is valid, the question of whether a document was served, when it was served, and what it contained can be directly decisive. Best practice is to retain: timestamps, email delivery receipts or read receipts, courier delivery confirmations, platform upload and access logs, and any other contemporaneous evidence that the document was transmitted to the correct person at the correct address, at the relevant time. Service Method Risk Table Service method Risk level Notes Personal delivery of document Low Safest; retain witness evidence Post to last known address (via registered post) Low-Medium Allow for delivery time; retain receipt Email to contractually authorised address Low (if contract authorises it) Retain delivery and read receipts; attach document directly Email without clear contractual authorisation or other clear legal basis High Queensland authority does not clearly establish that email alone will be effective under the Acts Interpretation Act fallback Aconex or similar platform (contract authorised) Medium May be effective if the contract permits; timing of access may be critical Dropbox, hyperlink download, or similar retrieval-only method Very high Queensland authority has treated this as carrying very significant validity risk Auto-generated portal document used instead of the approved form Very high May not satisfy the approved form requirement or the service obligation in s 79(4); this should be checked carefully against current authority Service by Email and Electronic Means Email service is common in the industry, but it should not be approached casually. The right to serve by email depends first on whether the contract authorises it, and second on whether the email is actually sent to an address that can be shown to have been accepted for that purpose. Queensland authority has created uncertainty about whether email alone satisfies the Acts Interpretation Act 1954 (Qld) as a "similar facility" to post or facsimile. That doubt can be managed by ensuring the contract expressly permits email service, but even then the serving party must be able to prove that the correct address was used and the document was actually transmitted in a way capable of being received and accessed. File-sharing links and document management platforms This is a high-risk area that deserves dedicated attention. Queensland authority indicates that service by Dropbox — or by any method that requires the recipient to click a link and download a file rather than receiving the document itself — carries serious risk for the purposes of the BIF Act and section 39 of the Acts Interpretation Act. The reasoning is that service by that method does not result in the recipient actually receiving the document; it merely gives them an opportunity to retrieve it. That is not the same thing. The point should be checked against the current authorities on electronic service, including the Queensland line of cases treating mere retrieval access differently from actual giving of the document. The position with project management platforms such as Aconex is more nuanced. Where the contract permits service via Aconex, service can be effective through that platform. However, uploading a document to Aconex and marking it "sent" does not automatically mean it has been served. Queensland authority indicates that upload alone may not be enough, and that questions of access, receipt, and contractual authorisation may be critical. Timing issues can therefore arise in circumstances where the deadline is tight and the respondent has not actively logged in. Direct delivery of the actual document by a clearly authorised method remains the only reliable approach. Practical Risk Point Before serving any document under the BIF Act, confirm: (a) the contract's authorised service method; (b) that the document itself — not merely a link — is being delivered; (c) that the correct address, email address, or platform is being used; and (d) that evidence of delivery (including timestamps, read receipts, or delivery confirmations) is retained immediately. Time Limits for Serving the Claim A valid claim must also be served within the statutory time limits. For most progress claims, the BIF Act requires service within the later of: the period worked out under the contract, if any; or six months after the work was last carried out or the related goods and services were last supplied. Different rules apply to final payment claims. Those claims are subject to a separate timing regime and should be checked carefully against the contract and the Act. The practical lesson is simple: service method and timing are both legal issues, not administrative afterthoughts. Stage 2: The Payment Schedule (The Response) The payment schedule is the respondent’s formal statutory response to the payment claim. It is not optional and it is not a document that can safely be left to the last minute. In many cases, the payment schedule will determine what the respondent can and cannot argue later. It is therefore one of the most important documents in the entire process. The Deadline to Respond Is Strict Once a valid payment claim is received, the respondent must provide a payment schedule within the earlier of: the time required by the contract; or 15 business days after the claim is given. That deadline is among the most unforgiving in the BIF Act. If it is missed, the respondent can lose critical defensive rights very quickly. A respondent should therefore identify the deadline immediately, calculate it conservatively, and begin preparing the schedule without delay. What Must a Valid Payment Schedule Contain? A valid payment schedule must: identify the payment claim to which it responds; state the amount the respondent proposes to pay (if any); and if that amount is less than the claimed amount, explain why payment is being withheld. Section 69 of the BIF Act governs these requirements. The time for giving the payment schedule is governed by s 76. Each element matters, and the consequences of deficiency escalate rapidly. No reasons vs insufficient reasons vs vague reasons — a critical distinction Queensland courts have drawn clear distinctions between the consequences of different levels of deficiency in a payment schedule: Where the payment schedule contains no reasons for withholding payment, there is a substantial risk that it will be treated as non-compliant, and in some circumstances invalid, with serious downstream consequences. Where the payment schedule contains insufficient reasons — that is, reasons that exist but do not adequately explain the basis for withholding — the respondent is confined to those reasons in the adjudication response and cannot introduce materially new reasons later. Where the payment schedule contains vague reasons — assertions such as "defective work", "overclaim", or "incomplete" without meaningful specificity — those reasons may give the claimant little of substance to address and the adjudicator little to work with in determining the adjudicated amount. Case law in practice Queensland authority indicates that where a payment schedule contains no articulated basis for challenging the valuation in the payment claim, the respondent may be treated as having failed to raise that valuation dispute properly. Where no reasons are stated for withholding payment, the schedule may be vulnerable to invalidity arguments. Where reasons are given but are inadequate, the respondent is generally confined to those reasons in the adjudication response. Authority also indicates that courts will not readily infer reasons from ancillary material such as old emails, meeting minutes, or prior correspondence unless the schedule itself makes the position clear. The respondent is bound by the reasons stated This is the fundamental principle that flows from the payment schedule: The respondent is generally confined to the reasons it has included, and cannot supplement or replace those reasons in the adjudication response: see ss 82(4) and 88(3) of the BIF Act. Queensland courts have confirmed that a respondent will not be permitted to rely on reasons that were not articulated in the payment schedule, even if those reasons were apparent from other documents in the parties' prior dealings. The court will not infer reasons from ancillary correspondence, meeting notes, or prior emails. The reasons should appear clearly within the four corners of the payment schedule itself. What the schedule should say The schedule should identify precisely which items or components of the payment claim are disputed, explain why each disputed item is not payable or is payable in a lesser amount, and — where the dispute concerns valuation — provide an alternative valuation with supporting reasoning. If defects are alleged, the schedule should identify the defective work specifically and, ideally, provide some indication of the estimated cost of rectification. If work is disputed as being outside scope, incomplete, or not yet certified, the schedule should explain that position in enough detail for the claimant to understand the case it has to meet. Supporting documents can assist, but the reasons must appear in the payment schedule itself. A schedule that attaches a voluminous report and says nothing of substance in its own body is a dangerous document. Self-contained is the benchmark The safest schedule is one that is fully self-contained: a reader who has only the payment claim and the payment schedule should be able to understand exactly what is disputed, why it is disputed, and what alternative position the respondent is advancing. Any gap in that picture may become difficult or impossible to repair later. The Severe Consequences of Failing to Provide a Payment Schedule Failing to provide a valid payment schedule on time is one of the most damaging mistakes a respondent can make under the BIF Act. The consequences are severe and, in practical terms, often immediate. Where no valid payment schedule is provided within the required period, the claimant may seek to recover the full claimed amount as the amount owed under the statutory regime, subject to the Act. The claimant may then pursue that amount either through adjudication or through court recovery as a statutory debt under ss 78 and 79 of the BIF Act — and in court proceedings, the respondent is statutorily barred from raising any defence or counterclaim under the construction contract. The respondent’s ability to contest the claim on its merits is materially curtailed in the statutory debt proceeding. The court's role is confirmatory, not evaluative. In adjudication, section 82(2) of the BIF Act provides that a respondent who failed to give a payment schedule as required under section 76 must not give an adjudication response at all. That is expressed as a statutory prohibition rather than a discretionary case-management power. That harsh result is not accidental — it reflects the BIF Act's deliberate design principle that respondents must engage formally and promptly when a payment claim arrives. Consequences of Serving a Valid Schedule vs Failing to Respond Issue Valid Schedule Served No Valid Schedule Served Respondent's position Preserved and defined May be severely compromised Ability to explain withholding reasons Yes, within the scope of reasons stated May be lost or drastically reduced Exposure to full claimed amount Reduced to disputed pathway Significantly increased — full amount owed Defence/counterclaim rights in court proceedings Preserved Barred by statute Adjudication posture Respondent may participate on preserved reasons Respondent may face serious statutory limitations or exclusion Strategic control Retained Often lost immediately If you are the claimant A poorly articulated payment schedule is an opportunity. Where the respondent's schedule fails to engage with your valuation, that acceptance may bind the respondent in adjudication. Where the schedule is missing altogether, your path to recovery — whether through adjudication or court — is significantly clearer. If you are the respondent The payment schedule is your most important document. It defines the case you can run in adjudication. Vague, incomplete, or missing schedules are not errors that can be repaired later. If you have received a payment claim and are unsure how to respond, obtaining advice from a construction lawyer before the payment schedule deadline expires is critical — once the deadline passes, the consequences are severe and largely irreversible. If you are the principal or head contractor The obligation to serve a payment schedule runs to your subcontractors independently. Each payment claim received triggers its own 15-business-day response obligation. A failure on any one claim can have immediate financial and strategic consequences. Stage 3: The Adjudication Application Once the payment dispute is ripe for adjudication, the claimant may lodge an adjudication application with the QBCC Adjudication Registry. This is a deadline-sensitive and form-sensitive step. A claimant who gets the application wrong may lose the right to adjudicate altogether. Strict Timeframes for Applying The applicable adjudication application deadline depends entirely on what happened after the payment claim was served. This is one of the most dangerous parts of the BIF Act, because there is no single universal window. The period changes depending on whether a payment schedule was served, what it said, and whether any payment was actually made by the due date. Getting this wrong is often fatal. A late adjudication application will ordinarily be invalid, and there is no general power under the BIF Act to extend the time for applying. In practical terms, the right to adjudicate that payment claim is usually lost. Pathway 1: A payment schedule is served for less than the claimed amount If the respondent gives a payment schedule and the scheduled amount is less than the amount claimed in the payment claim, the claimant generally has 30 business days after receiving the payment schedule to lodge an adjudication application. Under s 79(2)(b)(iii) of the BIF Act, time runs from receipt of the schedule, not from the due date for payment. The claimant should therefore calculate the deadline the moment the payment schedule lands, not when payment falls due. Pathway 2: No payment schedule is served and the full claimed amount is not paid If the respondent fails to give a payment schedule within the required time and also fails to pay the full claimed amount by the due date for payment, the claimant generally has 30 business days after the later of: (a) the due date for payment; and (b) the last day on which the respondent was entitled to give the payment schedule under s 76 of the BIF Act: see s 79(2)(b)(i). Because the trigger is the later of two dates, a claimant who miscalculates the payment schedule deadline will also miscalculate the adjudication application deadline. One error compounds into the other. Pathway 3: A payment schedule is served but the scheduled amount is not paid If the respondent gives a payment schedule, states a scheduled amount, but then fails to pay that scheduled amount by the due date for payment, the claimant has a shorter window: 20 business days after the due date for payment: see s 79(2)(b)(ii) of the BIF Act. This is the tightest deadline in section 79. It is also easily missed if a claimant incorrectly identifies the due date — a due date error here directly produces a deadline error. Why "business day" matters The BIF Act counts in business days, not calendar days. Public holidays and weekends are excluded. The BIF Act's definition of business day in sch 2 excludes three specific sub-periods: 22 to 24 December, 27 to 31 December, and 2 to 10 January. The intervening days (25–26 December and 1 January) are independently excluded as public holidays under the same definition. The practical effect is that no day from 22 December to 10 January counts as a business day under the BIF Act. The QBCC Act (ss 67U and 67W) achieves the same result by reference to a single continuous period from 22 December to 10 January inclusive. Either way, the holiday exclusion spans approximately three weeks and can significantly extend apparent deadlines near year end. It should be factored into every calculation near year end. The definition should be checked directly in sch 2 of the BIF Act when calculating any BIF Act deadline near year end. Lodgement timing within the day The QBCC approved Form S79 currently states that an adjudication application must be lodged no later than 5 pm on a business day, and that an application lodged after 5 pm is taken to be lodged on the next business day. That published requirement should be checked against the current QBCC form in use at the time of lodgement. (At the time of writing, the current QBCC Form S79 states that an application lodged after 5 pm on a business day is taken to be lodged on the next business day.) Calculate the deadline the day the trigger event occurs — whether that is the day the payment schedule arrives, the due date for payment, or the last day for a schedule. Adjudication Application Deadline Table Scenario General trigger General time to apply Payment schedule for less than claimed amount Receipt of payment schedule 30 business days No payment schedule and no full payment Later of due date for payment and last day for schedule 30 business days Scheduled amount unpaid by due date Due date for payment 20 business days Practice note: Always verify the current text of section 79 of the BIF Act and calculate the deadline against the actual chronology of the claim, schedule, and payment default. Do not rely on general recollection of the timeframes. Apply them to the specific dates in your matter. Preparing the Application: Form and Substance Under s 79(2)(a) of the BIF Act, an adjudication application must be made in the approved form. The QBCC currently publishes Form S79 for this purpose, and the current form states that the approved application form includes all seven pages. Case law in practice Queensland authority has emphasised the importance of using the approved form required by s 79(2)(a) and ensuring that the respondent receives the adjudication application and accompanying material required by s 79(4). In Platform Constructions Pty Ltd v Fourth Dimension Au Pty Ltd [2025] QCA 264, the Court of Appeal reinforced the need for strict compliance with the statutory service requirements. The practical obligation is to ensure that the respondent receives the complete approved form and the accompanying material served under the Act. Neither partial service nor reliance on an auto-generated portal document should be assumed to be a safe substitute without checking the current form, current QBCC process, and current authority carefully. Use of an outdated or incomplete form can create material validity risk. Because QBCC procedures and forms may change, applicants should always download the current form directly from the QBCC website immediately before lodging the application. They should not rely on saved copies, old templates, or prior project versions. (The current QBCC Form S79 also states that the claimant must give the respondent a copy of the approved application form and all accompanying submissions, and that the approved application form includes all seven pages.) Practical Risk Point: The Approved Form — All Seven Pages Queensland authority indicates that compliance with the approved QBCC form requirement is important and should not be treated as optional. The current seven-page Form S79 forms part of the adjudication application according to the QBCC form presently in use. Where the claimant completes an online lodgement via the QBCC portal, the system-generated confirmation document should not be assumed to be the same as the approved form for service purposes. The safest course is to download the current Form S79 directly from the QBCC website immediately before lodging the application, complete all seven pages in full, include the completed form in both the lodgement package sent to the QBCC and the copy served on the respondent, and retain proof that both steps occurred. Do not rely on the online portal’s auto-generated document as a substitute for the approved form unless the current legal position and QBCC process clearly permit that course. What Should the Application Contain? The application should clearly identify: the payment claim; any payment schedule; the construction contract; and the basis on which the claimed amount is said to be payable. The claimant should also include the submissions and evidence it relies on. In practical terms, this is the claimant’s main opportunity to present its case. Supporting material may include the contract, variation documents, correspondence, statutory declarations, expert material, payment records, site records, and any other evidence needed to explain why the amount claimed is payable. Serving the Application on the Respondent Lodging the application with the QBCC is not enough. The claimant must also give the respondent a complete copy of the adjudication application and its supporting material. This requirement should be treated seriously. Queensland authority has made clear that strict compliance matters here. If the respondent is not given the same material that was lodged, or if the approved form is not properly included, the determination may be exposed to challenge. The safest course is to: serve the complete approved form; serve the full set of lodged submissions and attachments; use a clearly authorised service method; and retain proof of service. If you are the claimant Treat the adjudication application as your primary opportunity to present your case. The adjudicator's decision will be shaped largely by what you lodge. Invest the time in clear, well-organised submissions supported by the contract, payment records, and contemporaneous evidence. Confirm the approved form, confirm the deadline, and confirm that what you serve on the respondent is identical to what you lodge with the QBCC. If the amount in dispute is significant, having the application prepared or reviewed by a construction lawyer experienced in adjudication is one of the highest-value steps a claimant can take. If you are the respondent When the adjudication application arrives, the clock starts immediately. Identify whether the claim is standard or complex, calculate your response deadline from that day, and begin preparation without delay. Check the application carefully — if it was lodged late, served incompletely, or does not use the current approved form, there may be a jurisdictional objection available. If you are the principal or head contractor If adjudication applications are being served on your subcontractors or on you, ensure your internal processes allow the relevant team to identify the application, calculate deadlines, and instruct advisers the same day. The timeframes are too short to accommodate internal routing delays. Stage 4: The Adjudication Response If the respondent is entitled to respond, the adjudication response is its formal opportunity to defend its position. Like the application, the response is governed by strict timing and confined content rules. Deadline for the Adjudication Response The response period is fixed by the Act and varies depending on whether the claim is a standard claim or a complex claim under the statutory scheme. The central practical point is this: as soon as the application is received, the respondent should calculate the deadline immediately and begin work on the response. A late response may be disregarded. For a standard payment claim, the respondent must provide the adjudication response within 10 business days after receiving the documents referred to in s 79(4) — that is, the adjudication application and any accompanying submissions — or within 7 business days after receiving notice of the adjudicator's acceptance of the appointment, whichever is the later. For a complex payment claim, the primary response period is the later of 12 business days after notice of the adjudicator's acceptance, or 15 business days after being served with the adjudication application. The specific extension mechanism available for complex claims is addressed below in the Standard vs Complex Claims section. An adjudication response submitted outside the applicable time limit may be disregarded by the adjudicator: see ss 82 and 88 of the BIF Act. Once the response is given to the adjudicator, the respondent must also serve a copy of the response on the claimant within 2 business days after providing it to the adjudicator. This service obligation is separate and must not be overlooked. Practical Risk Point As soon as the adjudication application is received, identify which type of claim it relates to (standard or complex), calculate the applicable response deadline from that day, and begin preparation immediately. Do not wait to confirm the adjudicator's acceptance before starting the response — by the time acceptance is confirmed, a significant portion of the response window may already have elapsed. Standard Claims and Complex Claims: Why the Distinction Matters The BIF Act draws a clear distinction between standard payment claims and complex payment claims. This classification determines the applicable timeframes for the adjudication response, the adjudicator's decision, and the availability of extension of time mechanisms. It has tactical implications for both claimants and respondents that are frequently underestimated. The statutory distinction Under section 64 of the BIF Act, a complex payment claim is a payment claim for an amount exceeding $750,000, or such greater amount as may be prescribed by regulation. A standard payment claim is any payment claim that does not meet that threshold — that is, a claim for $750,000 or less. Note that prior to 1 October 2020, the definition expressly referred to $750,000 exclusive of GST; the amending legislation removed that qualifier, and the current statutory text simply refers to $750,000 without specifying GST treatment in the definition itself. The classification is determined by the amount stated in the payment claim, not the amount in dispute and not the adjudicated amount that ultimately results. A claimant who claims $800,000 but whose claim is valued at $300,000 has still made a complex payment claim for the purposes of the classification exercise. (The classification issue should always be checked against s 64 and any current regulation prescribing a higher amount.) Because the current statutory text refers to $750,000 without specifying whether that figure is inclusive or exclusive of GST, the position is not free from doubt. The safer course, where the GST-inclusive amount exceeds $750,000, is to treat the claim as a complex payment claim for the purposes of calculating response deadlines and extension availability, and to check the current authorities on this point. Why the classification matters: response deadlines For a standard payment claim, the respondent must lodge its adjudication response within 10 business days after receiving the documents referred to in s 79(4) — that is, the adjudication application and any accompanying submissions — or within 7 business days after receiving notice of the adjudicator's acceptance of the application, whichever is later. For a complex payment claim, the respondent has a longer primary response period: the later of 12 business days after receiving notice of the adjudicator's acceptance of the application, or 15 business days after being served with the adjudication application (and any accompanying submissions). The longer window reflects the greater factual and documentary complexity that complex claims typically involve. Extension of time for complex claims For complex payment claims only, a respondent may apply to the adjudicator for an extension of time of up to 15 additional business days. To be eligible, the respondent must make the request in writing within the later of: 5 business days after receiving the adjudication application and any accompanying submissions served under section 79(4); or 2 business days after receiving notice of the adjudicator's acceptance of the adjudication application. The request must include reasons for requiring the extension. The adjudicator must decide the extension application as quickly as possible. If granted, the response must be provided within the extended timeframe. There is no equivalent extension mechanism for standard claims. A respondent who misses the standard claim response deadline has no equivalent statutory extension mechanism. Why the classification matters: decision timeframes The classification also affects how long the adjudicator has to decide the application. For a standard payment claim, the adjudicator must determine the application within 10 business days after the response date. For a complex payment claim, the adjudicator has 15 business days after the response date. If both parties agree, the decision period can be extended by consent before the original due date expires. For complex claims only, the adjudicator also has a unilateral power to extend by up to 5 additional business days. Queensland authority indicates that a decision delivered outside the applicable statutory timeframe will generally be void, including where the time limit in the Act has expired without a valid extension. Compare, for example, the reasoning in Civil Contractors (Aust) Pty Ltd v Galaxy Developments Pty Ltd & Ors; Jones v Galaxy Developments Pty Ltd & Ors [2021] QCA 10 on out-of-time determinations. Tactical implications From a claimant's perspective, a claim just above the $750,000 threshold will attract the complex claim classification and give the respondent more time to prepare a response. Claimants should be aware that a deliberate or inadvertent overclaim can push a claim into complex territory, changing the entire timetable. From a respondent's perspective, identifying that a claim is complex is critical to calculating the correct response deadline and assessing whether to apply for an extension of time. Standard vs Complex Claim Comparison Table Feature Standard claim Complex claim Threshold Up to $750,000 More than $750,000 Adjudication response period 10 business days after receiving the s 79(4) documents (adjudication application and any accompanying submissions), or 7 business days after receiving notice of the adjudicator's acceptance (later applies) 15 business days from application receipt, or 12 days from acceptance notice (later applies) Extension of time for response Not available Up to 15 additional business days (on written application made within the later of 5 business days after receiving the s79(4) documents or 2 business days after receiving notice of the adjudicator's acceptance) Adjudicator's decision period 10 business days after response date 15 business days after response date Adjudicator's unilateral extension Not available Up to 5 additional business days What Can Be Included in a Response? A respondent cannot use the adjudication response to introduce materially new reasons for withholding payment that were not first stated in the payment schedule: see ss 82(4) and 88(3) of the BIF Act. That rule is fundamental. The Golden Rule: You Cannot Raise New Reasons A respondent may: expand on reasons already given in the payment schedule; support those reasons with evidence; and explain the existing position in more detail. A respondent may not: use the response to introduce materially new reasons for withholding payment that were omitted from the payment schedule. This is why the payment schedule matters so much. A weak or vague schedule can lock the respondent into a weak adjudication position later. Set-Off and Cross-Claims in Adjudication A respondent may seek to reduce the adjudicated amount by raising a set-off or cross-claim in the payment schedule and adjudication response. However, the same confinement principle applies: the set-off or cross-claim must be raised as a reason for withholding payment in the payment schedule. A respondent who attempts to introduce a set-off or cross-claim for the first time in the adjudication response, without having identified it as a reason for withholding in the schedule, will face the same restriction under sections 82(4) and 88(3) of the BIF Act. The scope of what can properly be raised as a set-off in adjudication is a matter of ongoing debate. Queensland authority indicates that an adjudicator may consider a set-off where it is raised as a reason for withholding payment in the payment schedule, but the extent to which an adjudicator can determine a cross-claim that goes beyond the payment claim itself — for example, a claim for liquidated damages or delay costs — depends on the statutory framework and the way the issue is presented. The position should be checked against the current authorities. In practical terms, a respondent who intends to rely on a set-off should articulate it clearly and with sufficient detail in the payment schedule, including a quantified amount and the basis on which it is said to arise. A bare assertion of set-off without quantification or explanation is unlikely to give the adjudicator a proper basis for exercising the valuation function. Case law in practice Queensland courts have confirmed that section 82(4) of the BIF Act restricts the adjudication response to submissions relating to reasons for withholding payment that were included in the payment schedule. Where a respondent attempted to raise new reasons in its adjudication response that had not been articulated in the payment schedule, the adjudicator was required to disregard those submissions, and a determination that failed to apply that restriction was exposed to judicial review. The restriction applies even where the new reasons might have been compelling on their merits. The payment schedule is the respondent's single opportunity to define its position, and it must be used carefully. If you are the claimant Read the adjudication response carefully against the payment schedule. If the respondent has introduced materially new reasons for withholding payment that were not stated in the schedule, identify those in any permitted reply or further submission — the adjudicator is required to disregard them under ss 82(4) and 88(3) of the BIF Act. If you are the respondent The adjudication response is not a second chance to rewrite the payment schedule. It is an opportunity to expand on, support with evidence, and explain in detail the reasons you already articulated. If a reason was not in the schedule, it cannot be in the response. Prepare the response with the schedule open beside it at all times. If you are the principal or head contractor If your payment schedule was prepared internally without legal input, have it reviewed before the adjudication response is drafted. A vague or incomplete schedule may have already constrained the case you can run, and understanding those constraints early will avoid wasted effort on arguments the adjudicator must disregard. What if No Payment Schedule Was Served? If the respondent failed to serve a valid payment schedule when required, that failure has severe and immediate downstream consequences. Under s 82(2) of the BIF Act, a respondent who failed to give a payment schedule as required under s 76 must not give an adjudication response. The section is expressed in mandatory terms. This is one of the clearest examples of the BIF Act’s discipline: parties are expected to engage properly when the payment claim arrives, not wait and attempt to repair the position later. Stage 5: The Adjudicator’s Decision Once the application and any permitted response are before the adjudicator, the adjudicator must determine the application within the statutory timeframe. The decision matters because it creates an immediately enforceable interim payment outcome unless successfully challenged on narrow grounds. The Adjudicator’s Role and Powers An adjudicator’s task is statutory and confined. The adjudicator’s consideration is confined to the material the Act permits, principally under s 88 of the BIF Act, including: the relevant legislation, the construction contract, the payment claim, the payment schedule, the adjudication application, the adjudication response, and any permitted additional submissions or material. An adjudicator is not conducting a full trial. The adjudicator is performing a tightly confined statutory function. That is why the distinction between jurisdictional error and ordinary error matters. An adjudicator can be wrong on the facts or even wrong on some legal reasoning and still produce a binding determination, provided the adjudicator remained within power. How Construction Work Is Valued in Adjudication Valuation is the practical core of most adjudication disputes. The adjudicator must determine the amount of the progress payment, if any, to be paid. How that determination is reached depends on whether the construction contract provides a mechanism for valuing the work claimed. Contract-first valuation Where the contract provides for how construction work is to be valued, the adjudicator must ordinarily value the work in accordance with that mechanism: see s 72(1)(a) of the BIF Act. This might be a schedule of rates, a bill of quantities, a lump sum allocation with milestone payments, or a formula tied to measured progress. The same principle applies to related goods and services. If the contract provides a valuation mechanism, the adjudicator applies it. The parties' dispute is then about whether the contract mechanism has been applied correctly — not about what the general market value of the work might be. A common and hotly contested preliminary issue is whether the contract actually does provide a complete valuation mechanism. Parties frequently dispute whether a particular schedule, rate card, or clause is intended to govern valuation of the specific work in issue. Resolving that question can itself determine the outcome of the adjudication. Statutory fallback valuation Where the contract does not provide for how construction work is to be valued — or where there is no contract, or the applicable contractual term is void — the BIF Act specifies what the adjudicator must have regard to. Under s 72(1)(b), the adjudicator must have regard to: the contract price for the work; any other rates or prices stated in the contract; any variation agreed by the parties that adjusts the contract price or a rate or price by a specific amount; and, if any of the work is defective, the estimated cost of rectifying the defect. Agreed variations Agreed variations are included in the statutory fallback framework. Disputed variations — that is, variations that one party claims are instructed and the other disputes — require the adjudicator to determine whether the variation was in fact agreed and whether it adjusts the contract price. That assessment requires close engagement with the correspondence, instructions, and contemporaneous records. Defective work and estimated rectification cost Where a respondent raises defects in the adjudication, the adjudicator must engage with that issue in carrying out the valuation exercise required by s 72. Queensland authority indicates that where a contract does not provide how work is to be valued, an adjudicator who accepts the existence of relevant defects but fails to estimate rectification cost and factor that estimate into the valuation may expose the determination to jurisdictional error arguments, depending on the circumstances based on section 72(1)(b)(iv). If defects are sufficiently proved and the statutory valuation pathway applies, the respondent is entitled to have the adjudicator consider the estimated rectification cost in arriving at the adjudicated amount. This is why a payment schedule that raises defects must do more than simply assert they exist. It must provide enough information — ideally a quantified estimate with supporting material — to give the adjudicator a proper basis for exercising the section 72 valuation function. A vague reference to "defective work" without any quantification gives the adjudicator little to work with and may result in minimal or no set-off. Why valuation reasoning matters for challenge arguments An adjudicator who fails to undertake the valuation exercise required by the Act — by ignoring the applicable contractual mechanism, declining to estimate rectification costs, or simply not engaging with a materially significant item — may have failed to perform a central statutory duty. That failure can support a jurisdictional error argument on judicial review. Valuation is not a peripheral concern: it is the core statutory task. Valuation Framework Table Situation Governing approach Contract provides valuation mechanism Adjudicator must value work in accordance with the contract Contract does not provide valuation mechanism Adjudicator must have regard to: contract price, rates/prices in contract, agreed variations, and estimated defect rectification cost Defective work raised by respondent Adjudicator must estimate rectification cost and apply it as a deduction Disputed variation (not agreed) Adjudicator must determine whether variation was agreed before valuing it Agreed variation adjusting price by specific amount Included in statutory fallback valuation framework Retention and Part 4A of the QBCC Act Retention is one of the most frequently contested issues in Queensland adjudication. Part 4A of the Queensland Building and Construction Commission Act 1991 (Qld) (QBCC Act) directly regulates retention in building contracts, including limits on the amount that may be retained, the timing and conditions for release, and restrictions on the use of retention funds. An adjudicator is expressly permitted to have regard to Part 4A of the QBCC Act under section 88(2)(a) of the BIF Act, and disputes about whether retention has been lawfully withheld, whether it is due for release, or whether the contractual retention regime complies with the statutory limits frequently arise in adjudication. Where a respondent seeks to withhold retention from a progress payment, the payment schedule should identify the amount retained and the contractual or statutory basis for the retention. Where the claimant disputes the retention, the adjudication application should address whether the retention complies with Part 4A and whether the conditions for release have been met. Because Part 4A imposes mandatory requirements that override inconsistent contractual terms, a contractual retention clause that exceeds the statutory limits or that fails to comply with the prescribed release conditions may be void to the extent of the inconsistency. Parties should check the retention provisions in their contract against the current requirements of Part 4A before relying on a retention position in adjudication. What an Adjudicator Can Consider — and What Is Outside the Lane One of the most important and most litigated aspects of Queensland adjudication is the confined scope of what an adjudicator is permitted to consider. The adjudicator is not a court. The adjudicator is not conducting a general inquiry into the merits of the parties' contractual relationship. The adjudicator is performing a tightly defined statutory function, and the limits of that function are prescribed by section 88 of the BIF Act. The confined statutory role In deciding an adjudication application, an adjudicator may only have regard to the following material: the relevant provisions of the BIF Act and Part 4A of the QBCC Act (which regulates contractual terms, including limits on retention and set-offs); the clauses of the relevant construction contract; the payment claim to which the application relates, together with any submissions and supporting documents properly made by the claimant; the payment schedule (if any) to which the application relates, together with any submissions and supporting documents properly made by the respondent; the results of any inspection carried out by the adjudicator of any matter to which the claim relates. Under s 84(2)(b) of the BIF Act, the adjudicator may ask for further written submissions from either party and must give the other party an opportunity to comment on those submissions. This is a procedural power that sits outside s 88(2); it is not itself one of the matters listed in s 88(2). Submissions obtained through that process, once properly made, would ordinarily fall within s 88(2)(c) or (d) as submissions properly made by the claimant or respondent in support of their respective positions. The adjudicator may also call a conference of the parties under s 84(2)(d). In practice, the most common exercise of these procedural powers is a request for further written submissions on a specific issue. What falls outside the lane Several things the parties might wish to place before the adjudicator are simply outside the permissible scope. The adjudicator must not consider reasons for withholding payment that were not included in the payment schedule: see s 88(3) of the BIF Act. The adjudicator also cannot base a determination on a non-contractual document unless the estoppel arising from that document is framed so as to estop a party from denying that the construction contract itself was varied or amended to incorporate that document. In John Holland Queensland Pty Ltd v SecureFence Pty Ltd [2024] QSC 290, the Queensland Supreme Court treated the adjudicator's reliance on an estoppel arising from a document said not to form part of the subcontract as a jurisdictional error in the circumstances of that case. The decision illustrates the need for careful attention to the statutory limits on what may found an entitlement in adjudication. The significance for jurisdictional error arguments The confined scope of permissible consideration is directly relevant to judicial review. Where an adjudicator considers material that falls outside section 88(2), or fails to consider material that falls within it, the adjudicator may have gone beyond power or failed to perform a required statutory duty. Either may constitute jurisdictional error and expose the decision, or part of it, to being declared void. Equally, where an adjudicator fails to genuinely engage with the parties' submissions — not merely reading them but actually grappling with and forming a view on the issues raised — Queensland courts have found that to constitute a failure to comply with the essential requirements of the Act. Case law in practice Queensland authority indicates that the confined statutory role of an adjudicator is not merely procedural. It defines the limits of the adjudicator's power. An adjudicator who goes beyond section 88(2), or who fails to deal with material the Act requires to be considered, may produce a determination that is vulnerable to challenge. The lesson for parties preparing adjudication applications and responses is that the framing of the claim and the reasons in the schedule must be crafted with section 88 in mind from the outset. Adjudicator Consideration Matrix Material Can adjudicator consider? BIF Act provisions Yes QBCC Act Part 4A Yes Construction contract clauses Yes Payment claim and claimant's submissions Yes Payment schedule and respondent's submissions Yes Adjudicator's own inspection results Yes Further submissions requested by adjudicator (power under s 84(2)(b), separate from s 88(2)) Yes — adjudicator may request under s 84(2)(b) and must give the other party an opportunity to comment; once properly made, those submissions are considered under s 88(2)(c) or (d) New reasons for withholding payment not in payment schedule No — prohibited by s 88(3) Non-contractual documents (e.g. side agreements, estoppel-based entitlements) Generally no, unless estoppel goes to the contract being varied to include the document General correspondence or meeting notes not submitted as part of the adjudication No Timeframe for the Decision The adjudicator must decide the application within a strict statutory period calculated from the "response date." The response date is defined conditionally by s 85(2) of the BIF Act: if the respondent gives an adjudication response, the response date is the day the adjudicator actually receives it; if the respondent is prevented from giving a response under s 82(2) (because no payment schedule was served), the response date is the last day on which the respondent could otherwise have responded; and in any other case, the response date is the last day on which the respondent was entitled to give the response under s 83. In practice, this means that if the respondent gives its response early, the adjudicator's clock starts from that earlier date — the adjudicator is not automatically given the full response window if the respondent responds sooner. For a standard payment claim, the adjudicator must decide within 10 business days after the response date. For a complex payment claim, the adjudicator has 15 business days after the response date. These periods can be extended by written agreement of both parties, whether reached before or after the original decision period expires. For complex payment claims, the adjudicator also has an additional unilateral extension power: the adjudicator may extend the decision period by up to 5 additional business days, without the parties' consent. The adjudicator must separately notify the QBCC Adjudication Registrar of the extension within 4 business days after deciding to exercise that power: see s 86(4) of the BIF Act. A decision delivered outside the applicable statutory period — whether the standard 10 days, the complex 15 days, or any agreed or adjudicator-extended period — is likely to be invalid and unenforceable. Queensland courts have confirmed this position. The consequences can be severe: a claimant who has been awaiting a determination may find the entire application must be re-lodged, subject to the available time limits, if any remain. The practical lesson is that parties should monitor the expected decision date carefully. Where a decision has not arrived within the applicable window, specialist advice should be sought immediately. What the Decision Will Contain A written adjudication decision will usually identify: the adjudicated amount; the date for payment; any interest payable; and the allocation of adjudication fees. Unless the statutory position allows otherwise, it will also provide reasons. The decision then becomes the foundation for the next stage: payment, enforcement, or attempted challenge. If you are the claimant Monitor the expected decision date carefully. If the adjudicator's decision has not arrived within the applicable statutory period, seek specialist advice immediately — a late decision may be void. Once the decision issues, check the adjudicated amount, the payment date, and the interest calculation before moving to enforcement. If you are the respondent When the decision arrives, identify the payment deadline immediately. The obligation to pay is not suspended simply because you disagree with the outcome or intend to challenge it. If you are considering judicial review, obtain advice on whether a stay of enforcement is available and realistic before the payment deadline expires. If you are the principal or head contractor An adjudication decision against you or a party in your contractual chain can have immediate downstream consequences, including payment withholding requests that freeze money you owe or are owed. Take advice promptly on the decision's implications for your payment flows and any enforcement steps that may follow. Stage 6: After the Decision: Payment and Enforcement An adjudicator's decision ends the adjudication stage, but not the dispute's commercial consequences. Once the decision is made, the immediate questions become how to enforce the adjudication decision and recover the adjudicated amount. This is where the BIF Act's interim payment philosophy has practical force. The point is not merely to produce a legal ruling. It is to produce a payment outcome that can be enforced — and the Act provides a range of mechanisms to do so. Paying the Adjudicated Amount A respondent required to pay an adjudicated amount must generally do so within five business days after receiving the adjudicator’s decision, unless a later date is specified. That obligation is not suspended simply because the respondent disagrees with the outcome or intends to challenge it. (See s 90 of the BIF Act.) What if the Respondent Doesn’t Pay? If payment of the adjudicated amount is not made on time, the claimant has a range of statutory enforcement tools available. Adjudication certificate and court filing Under section 91 of the BIF Act, the QBCC Adjudication Registrar must issue the claimant an adjudication certificate within 5 business days after receiving a copy of the adjudicator’s decision, subject to the Act. Under section 93 of the BIF Act, that certificate may be filed in a court of competent jurisdiction as a judgment for a debt. The claimant can then seek to enforce the filed certificate using the usual judgment enforcement mechanisms available in Queensland, including enforcement warrants, seizure of assets, and garnishee orders against third-party debtors, subject to any stay or other relief granted by the court. Filing an adjudication certificate as a court judgment is faster than commencing fresh litigation. It does not involve a fresh merits determination of the payment dispute — the adjudicator has already determined the amount payable, and the court filing process is ordinarily straightforward. However, a respondent who disputes the adjudication on jurisdictional error grounds may seek to restrain enforcement pending a judicial review application, and Queensland courts have occasionally granted stays in appropriate circumstances. The test for a stay involves the court weighing factors including whether there is a seriously arguable case for jurisdictional error, the balance of convenience between the parties, and the risk of injustice if the stay is granted or refused. A stay is not automatic, and the respondent bears the onus of demonstrating why enforcement should be restrained. Where a stay is refused, enforcement may proceed notwithstanding the pending judicial review. The claimant should be aware that a stay application can be made at short notice and should be prepared to oppose it promptly. Payment withholding request Where the respondent is itself owed money from a party higher in the contractual chain — for example, a head contractor who owes the subcontractor an adjudicated amount but is itself owed retention or progress payments from the principal — the claimant can serve a payment withholding request on the party higher in the chain. That higher-level party is then required, subject to the Act, to withhold from any amount payable to the respondent a sum sufficient to satisfy the adjudicated amount. This mechanism effectively freezes money in the chain and can create significant commercial pressure on a non-paying respondent. (The details should be checked against the BIF Act provisions dealing with payment withholding requests before any request is issued.) Statutory demand caution Serving a statutory demand under the Corporations Act 2001 (Cth) as an enforcement step following an unpaid adjudication determination is available in principle but carries risk. A respondent who advances a genuine dispute or offsetting claim directed to the statutory demand, including one founded on an arguable challenge to the adjudication determination, may apply to set the demand aside, which can result in costly interlocutory litigation and delay recovery. In cases where a respondent is likely to contest the determination's validity, commencing enforcement via the adjudication certificate and court filing pathway is generally more efficient. The distinction between enforcement and final rights Enforcing an adjudication determination does not finally resolve all the parties' contractual rights. The BIF Act's regime is interim. A respondent who pays an adjudicated amount may still pursue the claimant in litigation or arbitration for repayment or damages arising from the underlying dispute, subject to applicable contractual and limitation period constraints. Payment of the adjudicated amount is not an admission of the substantive correctness of the determination. Court Recovery, Warning Notices, and Debt Pathways Adjudication is not the only statutory remedy available to a claimant seeking to recover money owed for construction work. The BIF Act also provides a parallel court recovery pathway that allows a claimant to recover the unpaid amount as a statutory debt. Understanding how these two pathways interact — and when each is strategically preferable — is essential for claimants managing live building or construction payment disputes. Recovery as a statutory debt Under section 78(2)(a) of the BIF Act, where a respondent fails to pay the amount owed to the claimant by the due date for payment, the claimant may recover the unpaid portion as a debt owing to the claimant in a court of competent jurisdiction. The "amount owed" for this purpose is: the full amount claimed in the payment claim (if no payment schedule was served); or the scheduled amount stated in the payment schedule (if a schedule was served but the scheduled amount was not paid). The right to court recovery arises upon the respondent's failure to pay by the due date — it is not conditional on having first attempted adjudication. Where no payment schedule was served: the statutory bar on defences Where the respondent failed to give a payment schedule within the required time, the consequences of court recovery are particularly severe for the respondent. Section 100(3) of the BIF Act provides that in all proceedings brought by a claimant to recover a debt under s 78(2)(a), the respondent is not entitled to bring any counterclaim or raise any defence in relation to matters arising under the construction contract, subject to the scope of s 100 and the issues properly open in the proceeding. On the article's reading of section 100(3), this bar applies in all proceedings to recover a debt under section 78(2)(a), whether or not a payment schedule was served. The scope and application of section 100(3) should be checked carefully against the current authorities. The bar is most consequential where no payment schedule was served, because in that scenario the recoverable amount is the full claimed amount and the respondent has no ability to contest it on the merits. Section 100(3) specifically bars the respondent from bringing any counterclaim or raising any defence in relation to matters arising under the construction contract; set-off arguments, to the extent they constitute a defence or counterclaim, would fall within that statutory bar. The court's role in those circumstances is largely confirmatory of the statutory preconditions: it considers whether the statutory preconditions have been met and, if so, may enter judgment accordingly. The warning notice requirement Before commencing court proceedings to recover a debt under the BIF Act, the claimant must first give the respondent a warning notice in the approved form (Form S99) under section 99 of the Act. The warning notice requirements are as follows: the notice must be in the approved QBCC form; it must be given after the due date for payment has passed; it must be given to the respondent no later than 30 business days after the due date for payment; and the claimant must wait at least 5 business days after giving the warning notice before commencing proceedings. The warning notice deadline is strict. A claimant who does not give the warning notice within 30 business days of the due date for payment will generally lose the right to pursue the statutory debt recovery pathway under the Act for that payment claim. This is another illustration of how the due date for payment drives every downstream calculation — a miscalculated due date means a miscalculated warning notice window. Importantly, giving a warning notice does not obligate the claimant to actually start court proceedings. The notice preserves the option. The claimant may instead choose to adjudicate, or to take some other step. The notice simply keeps the court door open. (See s 99 of the BIF Act and the current approved QBCC Form S99.) Relationship between court recovery and adjudication Court recovery and adjudication are alternative statutory pathways rather than mandatory sequential steps. A claimant may pursue either pathway, but should obtain advice before attempting to run both in parallel for the same payment claim. The strategic choice between them involves a number of considerations: Court recovery is typically faster and cheaper where no payment schedule was served, because the respondent is barred from raising defences and the court simply confirms the debt. Adjudication is generally preferable where the works are still ongoing, because an adjudicator will value the claim and that valuation may bind subsequent adjudicators in later payment cycles, subject to the Act and the issues then arising — meaning the outcome has continuing relevance to later payment cycles. Court recovery is subject to the warning notice requirement, which adds a mandatory waiting period of at least 5 business days after notice is given. Adjudication, once commenced, moves on its own timetable and does not require a pre-lodgement notice. Adjudication vs Debt Recovery — Key Comparison Factor Adjudication Court debt recovery Pre-condition Valid payment claim; applicable trigger event Valid payment claim; warning notice served on time Respondent's right to raise defences Preserved to extent stated in payment schedule Barred entirely if no payment schedule was served Speed Fast statutory timetable Depends on court; summary judgment possible Valuation Adjudicator values the work Court does not value; confirms statutory debt Ongoing works Valuation binding on later adjudicators Judgment may effectively be reversed by later payment cycles Strategic best use Ongoing project; disputed work value; payment schedule served Completed works; no payment schedule served; clean debt Suspending Work for Non-Payment Where a contractor or subcontractor has not been paid by the due date, the BIF Act gives the claimant a statutory right to suspend work for non-payment. That right extends to suspending construction work or the supply of related goods and services. This is a powerful commercial remedy. It is also one that must be exercised strictly and carefully, because a wrongful suspension creates its own liability exposure. (The right arises under s 98, read with s 78(3), of the BIF Act.) The required notice Before suspending work, the claimant must give the respondent a written notice of its intention to suspend. Under section 78(3) and section 98 of the BIF Act, that notice must state that it is made under the Act. No work or supply may be suspended until at least 2 business days after the notice is given. The 2 business day waiting period is mandatory. A claimant who suspends before it expires is unlikely to have the protection of the statutory right and may face a claim for wrongful suspension. Duration of the suspension right Once lawfully commenced, the suspension may continue until the outstanding amount is paid. Under section 98(2) of the BIF Act, the right to suspend ceases at the end of 3 business days immediately following the date on which the claimant receives the outstanding payment. The claimant should recommence work within that 3 business day window once payment is received, consistently with s 98(2) of the BIF Act. Interaction with contractual rights A claimant who lawfully suspends work under the BIF Act is protected from contractual consequences that would otherwise arise from the suspension. The Act provides that the claimant is not in breach of the construction contract by reason of the suspension, and is not liable in damages for loss or delay caused to the respondent as a result. However, this protection only applies where the suspension is lawfully carried out — that is, where the right to suspend has properly arisen, the notice has been given, and the waiting period has been observed. Risks of non-compliant suspension A suspension that does not comply with the statutory conditions — for example, because the notice was not given, the waiting period was not observed, or the right to suspend had not yet arisen — will not have the protection of the Act. In those circumstances, the claimant may be in breach of the construction contract, potentially exposing it to a termination for cause by the respondent or a damages claim. The practical lesson is that suspension should be approached methodically: confirm the due date has passed, give the compliant notice, wait the full 2 business days, and document the timing of every step. Practical Risk Point If you are considering suspension, confirm: (a) the correct due date for payment has passed; (b) a written notice in compliant form has been given and states it is made under the Act; (c) at least 2 business days have elapsed since the notice was given before work is stopped; and (d) evidence of the notice and the timeline is preserved. Do not suspend prematurely. Challenging an Adjudicator’s Decision: Judicial Review There is no general merits appeal from an adjudicator’s decision under the BIF Act. That means a dissatisfied party cannot simply ask the court to decide the payment dispute again because it believes the adjudicator got the facts or law wrong. The challenge pathway is much narrower. In substance, it is ordinarily confined to judicial review or related supervisory relief for jurisdictional error and related legality issues. (The court’s supervisory role is directed to legality, not to a general rehearing on the merits.) The High Bar for a Court Challenge Judicial review is not a rehearing. The court is not deciding whether the adjudicator made the best decision. The court is deciding whether the adjudicator acted within the power conferred by the Act and according to law. That makes judicial review a high-threshold, high-risk, and often high-cost remedy. It should not be treated as a routine post-loss tactic. Understanding Jurisdictional Error Jurisdictional error may occur where the adjudicator goes beyond power, fails to perform a central statutory duty, or proceeds in a way the law does not permit. Examples can include: deciding matters not properly referred; denying natural justice; failing to consider matters the Act requires to be considered; or proceeding where a jurisdictional precondition, such as a valid claim or valid application, was absent. (These are examples only. Whether a particular error is jurisdictional depends on the statutory requirement said to have been breached and the way the issue arose in the particular matter.) Jurisdictional Error vs Error of Fact/Law Issue Jurisdictional error Error within jurisdiction Nature Goes to power or legality Mistake made while validly exercising power Reviewability Potentially reviewable by court Usually not enough on its own Example No valid payment claim; denial of natural justice; deciding matter not referred Wrong valuation finding; wrong factual preference; arguable contractual interpretation error Consequence Decision or part of it may be declared void Decision may still remain binding This distinction is fundamental. Not every legal or factual mistake by an adjudicator invalidates the decision. If you are the claimant A respondent's threat of judicial review is a standard tactic and should not automatically deter enforcement. Adjudication certificates should be filed and enforced while a judicial review challenge is pending, unless the court grants a stay — although the availability of a stay will depend on the circumstances of the case and is passingly rare. If you are the respondent Judicial review is an expensive, high-risk remedy. Before committing to that course, obtain a frank assessment from a construction lawyer experienced in adjudication challenges as to whether a genuine jurisdictional error occurred — not merely whether the adjudicator's conclusion was wrong. An error of fact or law within jurisdiction will not succeed, and an unsuccessful judicial review application may result in costs orders in addition to the adjudicated amount. If you are the principal or head contractor Where an adjudication determination is made against you and enforcement is threatened, take immediate specialist advice. The window for strategic responses — including stays, judicial review, and parallel recovery steps — is short. Case law in practice Recent Queensland decisions have reinforced the narrow grounds for challenging an adjudication determination. In John Holland Queensland Pty Ltd v SecureFence Pty Ltd [2024] QSC 290, the court treated the adjudicator's reliance on an estoppel arising from a non-contractual document as a jurisdictional error in the circumstances of that case. The lesson is that jurisdictional error is a real basis for challenge, but the threshold remains high. Ordinary mistakes of fact or law, even arguable ones, will not ordinarily suffice. The Practical Steps of a Judicial Review Application A challenge to the validity of an adjudicator’s decision is ordinarily brought in the Supreme Court of Queensland by originating process supported by evidence. A judicial review application should be commenced promptly. While there is no fixed statutory limitation period equivalent to the adjudication application deadlines under section 79, delay in bringing the application can be a factor the court considers in deciding whether to grant relief. A respondent who is aware of a potential jurisdictional error but waits weeks or months before commencing proceedings may find that the delay itself weighs against the grant of discretionary relief, particularly where the claimant has taken enforcement steps in reliance on the determination in the meantime. If the court finds jurisdictional error, it may declare all or part of the determination void, and in an appropriate case may grant related relief. In some cases, the court may sever the invalid part from the valid part, leaving some portion of the adjudicated amount intact. That means judicial review is not simply about whether the respondent “wins” or “loses” the challenge. It is often a more complex commercial decision involving payment exposure, enforcement risk, timing, and litigation cost. For that reason, judicial review should be approached quickly and strategically, and only with specialist advice. Practical Closing Observations Queensland adjudication is powerful because it is fast, technical, and commercially consequential. That is also why procedural accuracy matters so much. For claimants, the recurring risks are: invalid claims; premature claims; service defects; missed application deadlines; and poor application preparation. For respondents, the recurring risks are: late schedules; vague schedules; assuming commercial correspondence is enough; trying to raise new reasons too late; and underestimating the speed and rigidity of the process. The outcome of any construction payment dispute under the BIF Act is shaped by the quality of the payment claim, the quality of the payment schedule, and whether the parties identified and complied with the critical statutory deadlines. Whether the dispute concerns a progress payment, a final payment, retention, or variations, the same principle applies: if adjudication is in prospect, urgency and precision matter more than volume and rhetoric. How Merlo Construction Lawyers Can Help If you are facing a construction payment dispute in Queensland — whether you need to make a payment claim, respond to one, apply for adjudication, defend an adjudication, enforce a decision, or challenge one — our construction lawyers can help. We act for contractors, subcontractors, suppliers, principals, and head contractors across Queensland on security of payment matters under the BIF Act. If you have a live payment issue and need advice quickly, contact us to discuss your position. FAQs What is security of payment adjudication in Queensland? It is a fast statutory process under the BIF Act for resolving payment disputes in the building and construction industry on an interim basis. Does the BIF Act apply to every construction contract? No. It applies only where the contract and the work fall within the statutory scope, and the Act also contains important exclusions. Can I make a payment claim without the correct QBCC licence? That may be a threshold problem. If the work required a licence and the claimant did not hold the appropriate licence, entitlement to payment may be defeated at the threshold. What is a reference date? It is the point at which a right to claim a progress payment arises, usually determined first by the contract and, if necessary, by the default provisions of the Act. What happens if I serve a payment claim too early? A prematurely served claim is invalid and fails a statutory precondition to adjudication: see generally ss 70 and 75 of the BIF Act. What makes a payment claim valid? In substance, it must identify the work or related goods and services, state the claimed amount, and request payment, while also being validly served and made on or after a valid reference date. How much detail does a payment claim need? Enough detail to allow the respondent to understand what is being claimed and how to respond. The required detail depends on the context. How long does a respondent have to serve a payment schedule? Generally, the earlier of the contractual period or 15 business days after the claim is given. What happens if no payment schedule is served? The respondent may face severe statutory consequences, including immediate liability exposure and major restrictions on its downstream position. How do I work out the due date for payment? Start with the construction contract. If the contract specifies when a progress payment becomes due, that date generally governs, subject to the QBCC Act maximum payment periods — 15 business days for head contracts and 25 business days for subcontracts. If the contractual term exceeds those caps, it is void and the BIF Act's 10 business day statutory default applies. If the contract is silent on when payment is due, the 10 business day default also applies. "Pay when paid" clauses have no effect. The due date controls almost every downstream deadline in the Act, so it must be identified correctly before calculating anything else. Can I serve BIF Act documents by email? That depends on whether the contract authorises email service. If it does, email to the contractually authorised address is generally a low-risk method, provided the document itself is attached directly and delivery evidence is retained. If the contract does not authorise email, relying on email alone carries material validity risk — Queensland authority has not clearly established that email satisfies the Acts Interpretation Act 1954 (Qld) fallback. Service by Dropbox, hyperlink, or any retrieval-only method carries very high risk regardless of the contract. How is retention treated in adjudication? Retention is regulated by Part 4A of the QBCC Act, which imposes mandatory limits on the amount that may be retained, the conditions for release, and the use of retention funds. An adjudicator is expressly permitted to have regard to Part 4A under section 88(2)(a) of the BIF Act. Where a respondent seeks to withhold retention, the basis for doing so should be clearly stated in the payment schedule. A contractual retention clause that exceeds the statutory limits may be void to the extent of the inconsistency. The retention provisions in any contract should be checked against the current requirements of Part 4A. Can a respondent raise new reasons in the adjudication response? Generally no. The response cannot be used to introduce materially new reasons for withholding payment that were not first stated in the payment schedule: see ss 82(4) and 88(3) of the BIF Act. How long do I have to apply for adjudication? It depends on the scenario. Different statutory triggers apply depending on whether a schedule was served, whether it scheduled less than the claimed amount, and whether payment was made by the due date. Why is section 79 so important? Because it governs the adjudication application timing pathways, and a late application will ordinarily be invalid. Do I need to use the QBCC approved form? Yes. Under s 79(2)(a) the application must be made in the approved form, and applicants should download the current version directly from the QBCC website before filing. Do I have to serve the adjudication application on the respondent as well as lodge it with the QBCC? Yes. The respondent must receive a complete copy of the adjudication application and its supporting material. How quickly does an adjudicator decide? Usually very quickly. The statutory timeframes are short and depend on the nature of the claim and applicable timing regime. What does an adjudicator’s decision include? Usually the adjudicated amount, the due date for payment, any interest payable, fee allocation, and reasons. What happens if the adjudicated amount is not paid? The claimant may pursue enforcement mechanisms including adjudication certificates and other statutory recovery tools. Can work be suspended for non-payment of the adjudicated amount? Potentially yes, but only if the statutory conditions and notice requirements are complied with strictly. Can an adjudicator’s decision be appealed? Not on the merits in the ordinary sense. The challenge pathway is generally limited to judicial review, or related supervisory relief, on narrow legal grounds, chiefly jurisdictional error. What is jurisdictional error in adjudication? It is an error that goes to the adjudicator’s power or legality, such as deciding matters outside the referral, denying natural justice, or proceeding without a valid jurisdictional foundation. Can defective work be raised as a defence in adjudication? Yes, but only if the defects are raised as a reason for withholding payment in the payment schedule. The respondent must identify the defective work specifically and, ideally, provide a quantified estimate of rectification cost. A vague reference to "defective work" without supporting detail gives the adjudicator little to work with and may result in minimal or no deduction. Do I need a construction lawyer for adjudication in Queensland? Adjudication under the BIF Act is technical, deadline-driven, and procedurally unforgiving. While the Act does not require legal representation, the consequences of a missed deadline, a defective payment claim, or an inadequate payment schedule can be severe and often irreversible. A construction lawyer experienced in security of payment adjudication can help ensure compliance with the Act's requirements and protect your position at every stage. Disclaimer This guide provides general information only. It does not constitute legal advice and should not be relied on as a substitute for advice on specific facts, contracts, claims, or disputes. Adjudication under the BIF Act is technical, deadline-driven, and highly fact-sensitive. If you are preparing a payment claim, responding to one, considering adjudication, or challenging an adjudication decision, you should obtain advice from a construction lawyer in Queensland with experience in security of payment adjudication tailored to your circumstances. Merlo Construction Lawyers advise on all aspects of adjudication under the BIF Act. Contact us for advice specific to your matter.

Key Takeaways Strict Statutory Exclusions Apply: Standard lease clauses purporting to recover all building costs are likely to be unenforceable if the expense constitutes "capital expenditure" under the Retail Shop Leases Act 1994 (Qld). Lease Specification is Mandatory: Under section 37, a landlord's contractual right to recover outgoings may be voided entirely if the lease fails to explicitly itemise the specific compliance upgrade costs and their calculation method. Disturbance Claims Mitigated by Emergency Provisions: While tenants may claim compensation for restricted access during upgrade works, statutory defences exist if the landlord’s actions are genuine emergency responses or required by law. Procedural Precision is Essential for Enforcement: Terminating a retail lease for unpaid outgoings demands strict adherence to Form 7 breach notice procedures; failure to comply renders re-entry actions unenforceable. When it comes to fire safety QLD landlords face a difficult question: can a mandated upgrade cost be passed through to tenants? You have just received an infringement notice from the local council demanding an immediate fire safety upgrade to your commercial premises, and the contractor's substantial quote is sitting on your desk. Naturally, you look to your lease's outgoings recovery clause to pass this expense through to your tenants. However, before you issue the annual estimate, your tenant's solicitor fires off an email citing the Retail Shop Leases Act 1994 (Qld) and asserting that these capital compliance costs are entirely yours to bear. The financial stakes of classifying this expense incorrectly are high: get it wrong, and you not only risk a protracted tribunal dispute, but you may inadvertently void your right to recover any building expenses for the year. This article delivers a practical framework to help Queensland landlords correctly categorise statutory upgrade costs and defend their outgoings ledger against formal tenant challenges. Approaching the Retail Outgoings Estimate Deadline for Sudden Building Upgrades You are staring at a massive invoice for a mandated fire safety or DDA accessibility upgrade, and the statutory deadline to issue your annual outgoings estimate is rapidly approaching. At this stage, the immediate question is not just how to pay for the works, but whether you can legally apportion these costs to your retail tenants without triggering an aggressive withholding dispute. The clock is ticking to classify the expense correctly before issuing your annual financial year documents. The Critical One-Month Statutory Window for Issuing the Outgoings Estimate Under Queensland law, a landlord must provide a detailed outgoings estimate at least one month before the start of the accounting period, otherwise tenants may legally withhold apportionable outgoings. This strict one-month procedural deadline is a common stumbling block when landlords face sudden compliance upgrade bills that disrupt normal accounting cycles. It is important to note, however, that the Queensland Small Business Commissioner (QSBC) cannot mediate disputes concerning the amount of rent or outgoings payable — the quantum of the outgoings itself is a matter for Queensland Civil and Administrative Tribunal (QCAT) — and neither the QSBC nor its mediators can issue binding directions independently of a signed mediation agreement or a QCAT order. If the unexpected fire safety costs delay the preparation of your annual financial documents, and you miss this window, the tenant's obligation to pay is suspended until the estimate is correctly provided. Attempting to enforce outgoings recovery retail lease Queensland without fulfilling this procedural step frequently leads to formal disputes. In such instances, tenants often refer the matter to the Queensland Small Business Commissioner—the key body facilitating mediation services for retail shop lease disputes in Queensland—which provides a structured process for parties to resolve such disputes before escalation to QCAT. Fire Safety QLD: Classifying Accessibility Upgrades Under the RSLA Before allocating costs to the tenant ledger, you must first assess whether the works satisfy the legal definition of recoverable maintenance or fall into prohibited capital expenditure. If the premises falls within the definition of what is a retail shop lease Queensland, the distinction between repair and capital upgrade dictates your recovery rights. Consider the following assessment factors: Determine the nature of the replacement: Replacing a single faulty smoke detector is often classified as routine maintenance; installing an entirely new addressable fire alarm system throughout the building usually constitutes a capital upgrade. Assess the structural impact: Works that substantially alter the building's fabric, such as widening doorways for accessibility compliance, are likely to be viewed as capital improvements. Review the compliance trigger: If the expenditure is required to bring an older, non-compliant building up to current modern standards (rather than fixing a broken item that was previously compliant), tribunals frequently categorise the expense as capital in nature. Examine the benefit lifespan: Costs providing a long-term, enduring improvement to the freehold asset's value generally lean toward capital expenditure, making them harder to pass through to a retail tenant. Stop guessing whether your mandated compliance upgrade qualifies as recoverable maintenance. Instruct our team to conduct a rapid statutory review of your outgoings estimate to secure your commercial position before issuing it to your tenants. The Hidden Danger of Standard "Gross Lease" Outgoings Clauses Expert insight: Landlords often mistakenly assume that a "gross lease" structure—where outgoings are theoretically bundled into a single higher rental figure—circumvents statutory itemisation requirements. However, if the lease agreement contains any mechanism allowing the rent to fluctuate based on underlying building expenses, it may still be subjected to retail leasing scrutiny. The practical problem that arises most frequently is this: a landlord and tenant negotiate a gross rent figure that both parties understood to include a building compliance component, the numbers stack up on a spreadsheet, and everyone signs. Then a fire safety upgrade arrives mid-term and the landlord attempts to recover an increment above the agreed rent figure, relying on a generic "all building costs" mechanism buried in the lease. At that point, section 37 does not care that the maths worked at execution — it requires that the specific outgoing be identified in the lease itself. Tribunals have shown little patience for landlords who argue that the spirit of the agreement captured the cost, because the legislative test is textual, not intentional. The result is that the landlord loses not just the incremental upgrade cost but, in some instances, the right to recover any outgoings contribution for that accounting period where the defective clause was the only operative recovery mechanism. If you are reviewing a gross lease structure and the compliance component is described anywhere as a "cost component," a "building levy," or a similar non-specific label rather than a precisely itemised outgoing, treat that lease as legally vulnerable before you issue any estimate that relies on it. Contractual Recovery vs RSLA Statutory Capital Cost Exclusions You have reviewed your lease agreement, and the outgoings recovery clause clearly states the tenant must pay for "all building operational and compliance costs." However, the tenant's solicitor has just flagged that this clause is overridden by retail leasing legislation. To defend your outgoings ledger, you must separate what your contract permits from what the statute strictly prohibits. Separating Contractual Pass-Through Rights from Section 7 RSLA Prohibitions Regardless of how broadly a lease defines recoverable expenses, Section 7(3)(b) of the RSLA excludes "expenditure of a capital nature, including the amortisation of capital costs" from the statutory definition of a lessor's outgoings, meaning such costs fall outside the recoverable outgoings framework entirely. This creates a distinct separation between a landlord's contractual exposure pathway—what the lease document says—and the overriding statutory liability pathway imposed by Queensland law. While a bespoke lease might attempt to categorise structural upgrades as routine operational expenses, the Retail Shop Leases Act 1994 (Qld) restrictions on capital costs act as a binding statutory limitation. This external legislative framework connects directly to the definition of outgoings in Queensland, detailing the specific exclusion of capital expenditure regardless of private agreement. Consequently, when preparing your landlord disclosure statement Queensland or annual estimates, any attempt to rely solely on a general contractual right to pass through fire safety system replacements is likely to fail if the works meet the statutory definition of a capital cost. How Section 37 Voids Non-Specific Outgoings Recovery Mechanisms Warning: While a broad outgoings recovery clause is intended to capture unforeseen building expenses, the enforceability of this clause depends entirely on strict adherence to legislative itemisation. Under Section 37 of the Retail Shop Leases Act 1994 (Qld)—which provides the direct statutory reference for the strict conditions governing a tenant's liability to pay outgoings under a Queensland retail lease—a lessee is not liable to pay an amount for outgoings unless the lease specifies: (a) the outgoings payable by the lessee; (b) how the outgoings will be determined and apportioned to the lessee; and (c) how the outgoings may be recovered by the lessor from the lessee. If a landlord attempts to pass through sudden compliance upgrade costs under a generic catch-all provision, tribunals may find that the lease fails to explicitly specify the expense, which can effectively void the tenant's liability to contribute to that specific cost. At Merlo Law, we routinely audit vulnerable lease structures for commercial landlords across Queensland and New South Wales before these documentation defects escalate into costly tribunal disputes. Our team reconstructs ambiguous outgoings clauses to ensure your recovery mechanisms align strictly with current statutory itemisation requirements. Secure your commercial standing by having us stress-test your lease agreements against the reality of sudden compliance upgrades. Preparing the Landlord's Audit Trail for Sudden Statutory Upgrades When facing a sudden statutory upgrade, assembling a clear administrative audit trail becomes your primary evidence factor. Landlords must proactively separate the contractor’s invoices into discrete components: isolating the costs of structural improvements or entirely new systems from the costs of routine testing, minor component replacement, and system maintenance. Instruct your contractors to provide highly detailed, itemised work orders that clearly identify the nature of the work performed. By establishing this clear documentary evidence before issuing the outgoings estimate, you ensure that the administrative records accurately reflect recoverable maintenance items distinct from non-recoverable capital expenditure. Defending the Compliance Upgrade Costs During a Formal Tenant Audit The tenant has formally rejected your outgoings estimate and initiated their statutory right to audit your expenditure. They are not only disputing the compliance upgrade costs but are also threatening a claim for business disruption while the contractors were on site. You must now pivot from administrative preparation to active defensive strategy. Substantiating Upgrades as Maintenance Rather Than Capital Expenditure During an outgoings audit, a Queensland commercial landlord must provide verifiable receipts and contractor reports to demonstrate that compliance works constitute routine maintenance rather than prohibited capital upgrades. This documentary package serves as a critical evidence factor when applying the statutory test. If the tenant’s auditor challenges a fire safety invoice, a generic receipt stating "fire system works" will likely result in the expense being struck from the ledger. Instead, the evidence must clearly establish that the works involved replacing worn components to maintain the existing system's operational standard, rather than installing a fundamentally new system to achieve a higher building classification. Defending Against Section 43 Business Disturbance Claims During Works Expert insight: When contractors restrict store access to complete compliance upgrades, tenants often attempt to use this disturbance as a separate exposure channel, demanding rent abatements or compensation. Section 43 of the RSLA imposes liability on a lessor to pay reasonable compensation for loss or damage across six paragraphs of triggers: substantially restricting the lessee's access to the leased shop; taking action (other than action under a lawful requirement) that substantially restricts or alters customer access to the leased shop or the flow of potential customers past the shop — both of which are contained within the single paragraph of section 43(1)(b); causing significant disruption to the lessee's trading; failing to rectify plant or equipment breakdowns or building defects as soon as practicable; neglecting cleaning, maintenance or repainting obligations; and causing the lessee to vacate due to extension, refurbishment or demolition of the building. For fire safety upgrade works, the most commonly engaged triggers are the access restriction under section 43(1)(a), the customer flow disruption under section 43(1)(b), and the trading disruption under section 43(1)(c). A statutory defence against business disturbance compensation claims may be available where the landlord can demonstrate the works were either a genuine emergency response or required for statutory compliance, however the existence and precise terms of this defence should be verified against the current version of the Retail Shop Leases Act 1994 (Qld) before reliance. The evidentiary burden sits squarely with the landlord. What this means in practice is that the infringement notice, the council's compliance direction, the contractor's scope of works, and the timeline linking all three need to be assembled and preserved before the works commence, not reconstructed afterwards when a disturbance claim lands. Landlords who proceed on the basis of a verbal contractor briefing or an informal council conversation, without retaining the underlying statutory compliance documentation, frequently find the defence unavailable at the point when it matters most. The other tactical reality is that the timing and manner of notice to the tenant is critical: landlords who provide written notice of the statutory compliance trigger before restricting access are in a materially stronger position than those who notify after the fact or only when the disturbance claim arrives. If the works genuinely fall within a mandatory compliance obligation, the defence is a solid one — but it requires the landlord to have built the paper trail from the moment the infringement notice was received, not from the moment the tenant's solicitor sends the first letter. Do not wait for a formal business disturbance claim to land on your desk before attempting to reconstruct your evidence. Request a review of your compliance documentation today so we can fortify your statutory defence before works commence. Managing Tenant Default, QCAT Escalation, and Right of Re-Entry The outgoings dispute has reached an impasse; the tenant has stopped paying their apportioned outgoings entirely, and mediation has failed. You are now looking at recovering the arrears through formal tribunal proceedings or exercising your ultimate leverage: forfeiting the lease. Executing these enforcement mechanisms requires flawless procedural discipline. When Tenants Can Lawfully Withhold Apportionable Outgoings A tenant's right to withhold outgoings under Queensland retail law is strictly enlivened if the landlord fails to provide the mandatory estimate or audited statement within the prescribed statutory timeframe. This statutory trigger provides tenants with a powerful self-help remedy. If a landlord misses the one-month deadline for the estimate, or fails to deliver the audited statement within three months after the end of the accounting period, the tenant is legally permitted to withhold payment of outgoings until the compliance failure is rectified. Enforcing Forfeiture for Unpaid Outgoings Using a Form 7 Breach Notice A landlord’s right to terminate a lease and physically re-enter the premises is a procedural mechanism governed by strict statutory requirements. While the lease agreement establishes the intended function of the right of re-entry clause to recover possession after a breach, the enforceability of this clause depends on mandatory legislative procedure. According to Section 124 of the Property Law Act 1974 (Qld)—which outlines the mandatory statutory hurdle for Queensland landlords seeking to forfeit a commercial lease for breach of covenant—a right of re-entry or forfeiture under any proviso or stipulation in a lease shall not be enforceable unless and until the lessor serves on the lessee a notice in the approved form, which in Queensland practice is prescribed as Form 7 under the subordinate legislation and approved forms framework. If a landlord attempts to evict a tenant for unpaid outgoings without first issuing a compliant breach notice commercial lease Queensland (Form 7) that provides a reasonable time to remedy the default, the termination action is likely to be deemed unlawful. Should landlords need to navigate this high-risk enforcement procedure, they may need to take steps to formally resolve a commercial dispute. Understanding Sub-Tenant Vesting Orders Under Section 125 When a landlord moves to forfeit a head lease, sub-tenants may utilise a separate exposure channel to protect their occupancy. Under section 125 of the Property Law Act 1974 (Qld), where a lessor is proceeding to enforce a right of re-entry or forfeiture, the court may make an order vesting the property comprised in the lease in any person entitled as under-lessee. This mechanism details the specific protective pathway for under-lessees facing eviction due to head lease forfeiture in Queensland. Consequently, landlords executing a forfeiture strategy must account for the fact that a sub-tenant can legally apply to the court for a vesting order, which may complicate the recovery of vacant possession. Landlords dealing with complex occupancy structures may benefit from choosing to speak with our team to clarify their position. Conclusion Returning to that sudden infringement notice and the substantial contractor quote sitting on your desk, the pathway forward is now clear. You understand that simply relying on a broad lease clause to pass through these compliance expenses exposes you to significant risk under the Retail Shop Leases Act 1994 (Qld). The distinction between a recoverable maintenance item and a prohibited capital upgrade is not just a matter of semantics; it is a critical statutory threshold that dictates whether your outgoings estimate will survive a formal tenant audit. Furthermore, you now know that procedural precision is your strongest defence. From issuing the outgoings estimate within the strict one-month window, to ensuring your lease specifically itemises the recoverable costs as mandated by section 37, and properly navigating the available statutory emergency defence against disturbance claims, your ability to recover these costs hinges on strict adherence to Queensland law. If the dispute escalates, any attempt to forfeit the lease for unpaid outgoings requires flawless execution of a Form 7 breach notice under section 124 of the Property Law Act 1974 (Qld). The immediate next step is to instruct your contractors to provide highly detailed, itemised work orders that clearly distinguish routine maintenance from capital improvements, allowing you to establish a defensible audit trail before issuing your annual outgoings estimate. Navigating the precise line between routine maintenance and prohibited capital upgrades requires more than just administrative care; it demands battle-tested legal strategy. Our senior commercial property team at Merlo Law has spent years advising landlords throughout QLD and NSW, defending against aggressive outgoings audits and managing high-stakes lease enforcement. Instruct us to oversee your contractor documentation and tenant correspondence to ensure your statutory rights remain protected at every stage. FAQs Can a commercial landlord recover capital expenditure as an outgoing in Queensland? Under section 7(3)(b) of the Retail Shop Leases Act 1994 (Qld), capital expenditure — including the amortisation of capital costs — is expressly excluded from the statutory definition of a lessor's outgoings. Because the cost falls outside the definition of recoverable outgoings entirely, attempting to classify a structural upgrade as a recoverable expense is likely to be unenforceable during a tenant audit. What happens if a retail lease does not specify the exact outgoings payable? Pursuant to section 37 of the Retail Shop Leases Act 1994 (Qld), a lessee is not liable to pay an amount for outgoings unless the lease explicitly specifies: (a) the outgoings payable by the lessee; (b) how the outgoings will be determined and apportioned to the lessee; and (c) how the outgoings may be recovered by the lessor from the lessee. A lease that names a specific outgoing but fails to address how it is determined, apportioned, or recovered will still fail the section 37 test, and a generic catch-all clause may void the tenant's liability to contribute to sudden compliance upgrade costs entirely. Can tenants withhold outgoings if the annual estimate is late? Yes, under Queensland retail leasing law, if a landlord fails to provide the mandatory outgoings estimate at least one month before the accounting period, the tenant's obligation to pay apportionable outgoings is legally suspended until the estimate is correctly provided. Can a landlord evict a tenant immediately for unpaid outgoings? No, a landlord's contractual right to forfeit a lease for unpaid outgoings is conditional and generally unenforceable until the landlord strictly complies with section 124 of the Property Law Act 1974 (Qld) by serving a prescribed Form 7 breach notice and allowing a reasonable time to remedy. What rights do sub-tenants have if the head landlord forfeits the lease? When a landlord proceeds to forfeit a head lease, sub-tenants hold a statutory right under section 125 of the Property Law Act 1974 (Qld) to apply to the court for a vesting order, which may protect their interest and allow them to retain possession of the premises. This guide is for informational purposes only and does not constitute legal advice. For advice tailored to your specific circumstances, please contact Merlo Law

Key Takeaways The DLP is not a complete shield: The expiration of a 12- or 24-month Defect Liability Period under your EPC subcontract does not extinguish your exposure; you remain liable for latent civil works defects for up to six years under the Limitation of Actions Act 1974 (Qld). Regulatory intervention is strictly time-barred: The Queensland Building and Construction Commission Act 1991 (Qld) power to issue a direction to rectify defective work is capped at six years and six months from the completion of the work under section 72A(4) of the QBCC Act, limiting indefinite exposure. This cap is not absolute — the QBCC may apply to Queensland Civil and Administrative Tribunal (QCAT) to extend that period in exceptional circumstances — but such extensions are rarely granted and the primary position strongly favours the contractor where the work was completed more than six and a half years ago. Denial of site access is a practical and contractual defence: an EPC head contractor issues a defect notice but restricts your ability to investigate the solar or wind farm site, this may support a defence against QBCC non-compliance on the basis that compliance was rendered impossible by circumstances outside your control. Ground conditions vs. defective workmanship: Proactive contractors often pivot civil foundation or access road defect claims by formally reclassifying the failure as a latent geotechnical condition, relying on contemporaneous interface sign-offs. The head contractor has just emailed a formal defect notice demanding you tear up and relay 400 metres of access road at the solar farm site—18 months after practical completion. They claim the subgrade has failed, your 12-month Defect Liability Period (DLP) has expired, and if you don't mobilise a crew by Monday, they will report you to the QBCC and withhold the costs from your next milestone payment on an entirely different project. This is the moment where commercial pressure often overrides legal reality. You are suddenly forced to defend work that was signed off over a year ago, facing down an EPC contractor intent on passing through the developer's operational losses directly to your balance sheet. Decoding the EPC Defect Notice: Navigating Your First 48 Hours You are looking at a demand to rectify work long after you thought your exposure was closed out, and the immediate instinct is to either aggressively deny the claim or mobilise a crew just to make the problem go away. This section maps exactly how to triage the claim and identify whether the EPC contractor actually has the legal leverage they assert, or if the contractual and statutory clocks have already run out. Separating Contractual Defect Liability Periods from Statutory Limitation Windows The expiration of your 12-month Defect Liability Period (DLP) only extinguishes the principal's automatic right to order you back to site to rectify minor snags. It does not erase their underlying right to sue you for breach of contract. A DLP clause is designed to regulate the practical rectification of visible defects and the release of retention monies post-completion. However, the enforceability of this clause as a complete barrier to future claims depends on its precise wording; it does not override the overarching statutory limitation framework unless the subcontract contains an explicit and enforceable waiver of future rights, which is exceptionally rare. In Queensland, civil contractors remain exposed to latent defect claims for six years under a simple contract, regardless of the expiration of the contractual DLP. Mapping Your Immediate Response Sequence for Greenfield Asset Failures When a post-DLP defect notice lands on your desk, your first action is to secure the documentary baseline. Do not concede liability or offer to inspect the site as a gesture of goodwill until you have verified the following: Locate the final practical completion certificates: Identify the exact date practical completion was certified to determine whether the contractual DLP has genuinely expired. Isolate interface signoffs: Retrieve the specific handover dockets where the electrical BoP or EPC contractor took possession of your civil structures, particularly noting any joint inspections of the foundation pads or access roads. Verify the physical timeline: Map the exact dates the alleged failure was first observed against site activity logs to identify if other trades operated heavy machinery in that area after your demobilisation. Freeze informal communications: Direct all project managers to cease text or email discussions with the head contractor about the defect until a formal contractual response is prepared. Stop all informal texts and emails immediately. Instruct our team to take control of project communications and secure your commercial position before inadvertent admissions compromise your defence. The Statutory Ticking Clock on Civil Balance of Plant Liability The critical question in any limitation period defects claim Queensland is when the statutory clock actually started ticking. As a general rule, the cause of action for a breach of contract claim typically arises when the defective work is completed or the breach of contract occurs. However, this is not the complete picture. Section 10AA of the Limitation of Actions Act 1974 (Qld) can operate to extend the limitation period where the claimant was not aware, and could not reasonably have been aware, of the facts giving rise to the cause of action. For underground civil works — such as compaction layers beneath an access road or subsurface foundation elements — this discoverability provision is particularly significant, because the defect may be physically concealed for years after completion. What this means in practice is that an EPC contractor may attempt to argue that the six-year clock did not begin running until the subsurface failure became apparent, potentially extending their window to bring a claim well beyond the date of practical completion. You must forensically assess whether the discoverability provision could be invoked against you on the specific facts of the alleged defect. This timeline is particularly significant on utility-scale renewable energy projects, which are designed with 25-year operational lifespans. An EPC contractor may attempt to enforce a long-tail claim for foundation subsidence well into the asset's operational phase. Because the determination of when a cause of action accrues depends heavily on the specific facts and the wording of the subcontract, you must forensically trace the timeline back to the exact date of the alleged substandard concrete pour or compaction failure. How Civil Contractors in Queensland Defend Against QBCC Directions The head contractor hasn't just threatened a breach of contract claim; they are now threatening to report your firm to the building regulator to secure a direction to rectify and force an immediate, uncompensated return to site. You may feel cornered by the prospect of compliance action impacting your hard-earned QBCC licence, but this section gives you the exact boundary lines of the regulator's reach and the statutory defences available to protect your business. How Principals Leverage Section 72 Directions to Bypass Subcontract Forums EPC head contractors frequently attempt to leverage the Queensland Building and Construction Commission (QBCC) as a weapon to exert rapid commercial pressure, deliberately sidestepping the slower arbitration or expert determination clauses written into the bespoke subcontract. Under section 72(2) of the Queensland Building and Construction Commission Act 1991 (Qld) s 72, the QBCC has statutory power to compel a civil contractor to rectify defective work, providing that "the commission may direct the person who carried out the building work to do the following... rectify the building work." What is important to understand is that the QBCC's statutory decision-making process requires the inspector to form a view on whether the building work is defective, who was responsible for it, and whether it would be unfair to issue a direction in the circumstances — all before a formal direction is made. When a complaint involves a technically complex geotechnical or structural failure on a utility-scale renewable energy project, satisfying those requirements involves a level of technical assessment that goes well beyond a routine residential defect complaint. In practice, the QBCC will often provide the contractor with an opportunity to respond before any direction is formalised, and that response window — the length of which is not legislatively fixed and will vary depending on the circumstances and the nature of the complaint — is your most operationally valuable period. It is the interval in which a well-prepared contractor can place before the regulator a chronology of interface sign-offs, the head contractor's own quality surveillance records, and any geotechnical evidence pointing to a latent condition, all of which can cause a reasonable inspector to pause before issuing a formal direction. Where the subcontract contains a tiered dispute resolution clause — an engineer's determination followed by expert determination or arbitration — the QBCC will not automatically defer to that mechanism. The regulator's statutory function is not suspended merely because the parties have a private contractual pathway. What this means tactically is that you cannot simply write to the QBCC and say the matter is "subject to arbitration" and expect the complaint to be shelved. What you can do is demonstrate to the inspector, with documentary precision, that the alleged defect is genuinely in dispute on technical grounds and that the subcontract obliges the parties to resolve it through a prescribed mechanism. In the experience of practitioners advising in this space, regulators tend to proceed more cautiously — and sometimes informally adjourn their investigation — when a contractor presents a credible technical rebuttal rather than a purely procedural objection. The commercial threat embedded in a QBCC complaint is real, but it is frequently front-loaded: the head contractor is banking on the fear of licence consequences forcing immediate mobilisation before you have had any opportunity to formally contest the underlying liability. At Merlo Law, we frequently manage these aggressive, front-loaded regulatory threats for civil contractors operating across Queensland and NSW. We build precise, documentary-led rebuttals that interrupt the principal’s leverage and force the regulator to pause, allowing you to handle the underlying technical dispute on proper commercial terms. The Rigid 6.5-Year Statutory Cap on Regulatory Intervention If the civil works, such as access roads or trenching, were completed more than six years and six months ago, the regulator is strictly prohibited from issuing a direction. Section 72A(4) of the QBCC Act imposes a strict time bar preventing the commission from issuing a direction to rectify once six years and six months have passed since the building work was completed or left in an incomplete state. It is important to note that this cap is not entirely absolute: the QBCC may apply to QCAT for an extension of this period if it can satisfy the tribunal that exceptional circumstances exist. However, such applications are rare, and where the six-and-a-half-year period has elapsed, the EPC contractor will ordinarily be left with commercial litigation pathways rather than regulatory enforcement options. Triggering Impossibility Defences When the Head Contractor Denies Site Access Warning: If the EPC head contractor demands rectification but simultaneously refuses to allow you access to the active operational solar farm to inspect the alleged pad failure, you must proactively and formally document this refusal in writing. The primary statutory basis for this defence is section 72(5) of the QBCC Act itself, which provides that the commission is not required to give a direction if it is satisfied that, in the circumstances, it would be unfair to the contractor to do so. The Act expressly identifies an owner's refusal to allow a contractor to return to site as an example of circumstances that may make issuing a direction unfair, and the QBCC's own Regulatory Guide confirms this position. While section 74 of the QBCC Act provides separate defences for licensed contractors in relation to licence authorisation matters, the more directly applicable protection in a site access scenario is section 72(5). Broader common law and contractual impossibility arguments may also be available in support, but they are secondary to this statutory foundation. Producing written evidence that the principal blocked your access to the site reinforces the section 72(5) argument and in practice can cause the regulator to proceed with greater caution before formalising a direction. How Civil Contractors in Queensland Convert Foundation Failures into Latent Condition Claims The defect has been isolated, and it is becoming clear that the issue likely stems from shifting subsurface soil profiles, rather than your crews failing to achieve proper compaction or a substandard concrete pour. You must now transition from playing defense against a defect notice to playing offense by initiating a latent conditions claim or a design-variation argument, pushing the liability back up the contractual chain. This section provides the strategic mechanisms necessary to redefine the scope of the dispute. The Geotechnical Pivot: Distinguishing Defective Workmanship from Subsurface Reality Proactive civil BoP contractors often attempt to pivot an EPC defect notice for greenfield access road or foundation failures by formally converting the issue into a latent geotechnical condition claim. The mechanical structure of this argument relies on baseline geotechnical reports provided during the tender phase, with contractors arguing that the failure resulted from unforeseen soil reactivity — typically expansive clays, uncharted fill sequences, or perched water tables that were not identified in the principal's desktop study — rather than defective workmanship. In practice, however, the framing of this argument needs to be far more surgical than simply pointing at a geotechnical report and asserting the ground was difficult. The contractors who navigate this successfully tend to have done two things well at the time the work was executed, not after the defect notice arrives. First, they issued contemporaneous RFIs or site instructions during the construction phase specifically querying ground conditions that deviated from the tender-phase geotechnical data. An RFI raised at the time of the compaction works noting, for example, that the encountered subgrade material was reactive clay rather than the sandy loam described in the site investigation report is extraordinarily difficult for an EPC contractor to later characterise as a workmanship failure. Second, they obtained sign-off from the EPC's own site representative — whether a superintendent, a quality surveillance engineer, or a hold-point inspector — at the completion of each foundation pour or compaction layer. Where those hold-point release signatures exist, the contractor can credibly argue that the principal's own representative accepted the work as conforming at the time of construction. The critical weakness in the latent condition pivot under heavily amended bespoke EPC subcontracts — as opposed to lightly amended AS 4000 forms — is that many bespoke subcontracts contain geotechnical risk allocation clauses that assign the entirety of subsurface risk to the civil subcontractor, regardless of what the principal's tender-phase investigation showed. Practitioners regularly encounter clauses stating that the subcontractor has satisfied itself as to ground conditions and accepts all risk of subsurface variation. Where such language is present, a latent condition argument becomes extremely difficult to sustain unless the contractor can demonstrate that the actual conditions encountered were so materially different from anything a reasonable contractor could have anticipated — even with thorough pre-tender investigation — that the clause should not be construed to extend that far. This is a narrow argument and courts treat it accordingly. For strategic guidance on how to manage these specific claims, you should consult Queensland building and construction lawyers who are familiar with the specific drafting conventions used in utility-scale renewable energy subcontracts. Do not let restrictive boilerplate clauses force you into accepting geotechnical liability without a fight. Request an urgent review of your subcontract and site records to determine if a hard-hitting latent condition claim can be mounted. Formalising the Rebuttal Under Bespoke Subcontract Time Bar Clauses Warning: The protection offered by a latent condition clause is entirely conditional upon strict compliance with the subcontract's time bar and notification requirements, and courts have scrutinised similar clauses where contractors have failed to issue notices within the prescribed window. The notice period will be whatever your specific subcontract prescribes — bespoke EPC subcontracts vary significantly, with some requiring notice within as little as 48 hours of discovery, others allowing 7, 14 or even 28 days, and some containing no fixed period at all. You must locate and read the precise notice provision in your subcontract immediately upon identifying a potential latent condition. If you do not issue the correct notice within that contractually prescribed window, you may fatally compromise your ability to reject liability, effectively turning a valid geotechnical defence into an undefendable Queensland construction contract dispute. To identify the correct notice obligation, you need to do two things simultaneously, not sequentially. First, locate the defined "Latent Conditions" clause — typically a standalone numbered clause in the subcontract's general conditions — and note the prescribed time period from the date of discovery. Second, cross-reference that clause against the subcontract's general "Notices" clause, which will almost always impose additional formal requirements that apply to every notice issued under the contract, including the required method of delivery (email to a nominated address, registered post, or delivery to a physical address), the required content (a description of the condition, the likely impact on the works, and the additional cost or time sought), and in some bespoke EPC subcontracts, a requirement that the notice be accompanied by supporting documentation such as photographs or a preliminary geotechnical assessment. Satisfying the time bar alone is not sufficient if the notice does not also comply with the form requirements prescribed by the general Notices clause. To illustrate the practical stakes: if your subcontract requires a latent condition notice within 7 days of discovery and you issue a compliant notice on day 6, but you deliver it by email to the EPC project manager's personal address rather than to the nominated contract administrator's address specified in the contract particulars, a bespoke EPC subcontract with a strict form requirement may treat that notice as invalid. In that scenario, you have met the timing requirement but failed the form requirement, and the result may be identical to having issued no notice at all. Always prepare and deliver your latent condition notice against both the timing clause and the general Notices clause simultaneously, and retain proof of delivery at the correct address. The viability of defending a civil foundation defect as a latent condition heavily depends on issuing formal notice strictly within the bespoke subcontract's time bar provisions. Safety Prosecutions: When Civil Structural Failures Enliven WHS Enforcement The situation has just escalated: that cracked access road or unstable foundation isn't merely a commercial headache anymore; it has caused a mobile crane to tilt dangerously close to overhead powerlines during an operational maintenance lift. You are now looking at how a civil defect rapidly transforms into a high-stakes safety investigation, potentially exposing the company and its directors to a statutory liability pathway. Expanding Section 26 Duties Beyond Practical Completion Detail the ongoing statutory Work Health and Safety Act 2011 (Qld) duty under section 26 of the Work Health and Safety Act 2011. Section 26(2) of the WHS s 26 states that "The person must ensure, so far as is reasonably practicable, that the way in which the plant or structure is installed, constructed or commissioned ensures that the plant or structure is without risks to the health and safety of persons". This means civil contractors have a non-excludable statutory WHS duty regarding the structural integrity of their work. If a severe structural failure—such as a collapsing foundation or trench—endangers health and safety, it can trigger regulator investigations and prosecution entirely separate from the contractual mechanism for civil works defects on renewable energy projects. Civil BoP contractors in Queensland carry an ongoing duty under the WHS Act to ensure the structures they construct are without health and safety risks, regardless of contractual defect milestones. The Three-Tier Prosecution Framework and Officer Liability Understanding the practical prosecution exposure under the Work Health and Safety Act 2011 (Qld) requires more than recognising that a duty exists — it requires understanding how that duty is enforced and who within your organisation is personally at risk. The WHS Act structures offences across three categories of increasing severity. A Category 3 offence involves a failure to comply with a health and safety duty without exposure to a risk of death or serious injury, carrying a maximum penalty of $50,000 for an individual or $500,000 for a body corporate. A Category 2 offence arises where the failure exposes a person to a risk of death or serious injury or illness, carrying a maximum penalty of $150,000 for an individual or $1,500,000 for a body corporate. A Category 1 offence — the most serious — applies where the person engages in conduct that is negligent, exposes an individual to a risk of death or serious injury, and the person is reckless as to that risk, carrying a maximum penalty of $300,000 for an individual or $3,000,000 for a body corporate, with imprisonment of up to five years also available for individuals. Critically, section 27 of the WHS Act imposes a separate duty on officers of a person conducting a business or undertaking — including directors and senior managers of a civil BoP contracting company — to exercise due diligence to ensure the company complies with its WHS duties. Where a structural failure such as a foundation collapse or access road subsidence causes or risks a serious safety incident on an operational renewable energy site, the regulator's investigation will not be limited to the company entity. It will extend to whether the company's directors and project managers exercised due diligence, including whether they put in place and monitored appropriate systems for inspecting and maintaining the structural integrity of completed civil works during the asset's operational phase. The fact that your contractual DLP has expired provides no protection whatsoever against a section 27 prosecution. In the immediate aftermath of a safety incident involving a structural failure, your firm should take the following steps before engaging with either the head contractor or the regulator on the defect liability question: secure the incident site and prevent further access; preserve all contemporaneous records including compaction test results, pour records, and hold-point sign-offs; engage WHS legal counsel independently of any construction law advice on the defect claim; and issue a formal written notification to your insurer. The defect liability dispute and the WHS investigation must be managed through separate legal channels from the outset, because admissions made in the context of a commercial rectification response can have direct and serious consequences in a parallel safety prosecution. Our team has extensive on-the-ground experience defending civil contractors against complex statutory investigations across QLD and NSW. We establish strict legal barriers between your commercial defect response and regulatory safety probes, ensuring that standard operational communications do not inadvertently expose your executive team to personal liability. Establishing Documented Sign-Offs to Quarantine Multi-Trade Liability Example: Consider a scenario where an electrical BoP contractor installs multi-ton transformers onto your previously certified concrete pads, causing them to crack. Because liability on a shared site is highly complex, properly delineating the scope split between civil and electrical BoP is critical. If you have meticulous, contemporaneous interface sign-offs at the point of handover, this documentation can be relied upon as evidence to prove the defect was caused by the subsequent trade's overloading or vibration. Without these sign-offs, courts or regulators may hold you proportionately liable for the failure, complicating your defence in an EPC subcontract dispute. Properly executed handover protocols may help quarantine your firm from both commercial recovery actions and overlapping WHS prosecutions. Conclusion The demand to tear up 400 metres of access road 18 months after demobilisation does not have to end with your firm absorbing the developer's operational losses. As we have seen, the expiration of your contractual DLP does not mean the issue is closed, but neither does it mean the EPC head contractor or the QBCC holds unchecked power over your business operations. You now know that regulatory directions to rectify are strictly capped at six years and six months, and that a principal's refusal to grant you site access can enliven statutory defences. You also understand that shifting the narrative from a workmanship failure to a latent geotechnical condition—or a multi-trade interface overloading issue—requires meticulous documentary evidence and strict adherence to contractual notice timeframes. The immediate next step is not to mobilise a remediation crew. What the analysis in this article makes clear is that a well-prepared civil BoP contractor has not one defence but a layered stack of them, and the priority is to assess which layers are available on your specific facts before committing to any response. Work through the stack in this order. First, check the statutory time bar: if the civil works were completed more than six years and six months ago, the QBCC's regulatory power has expired and the head contractor is confined to commercial litigation. Second, check the site access position: if the head contractor is demanding rectification while denying you access to investigate, document that refusal in writing immediately, because it directly supports the section 72(5) unfairness defence. Third, assess the geotechnical pivot: locate your baseline geotechnical reports, your contemporaneous RFIs, and your hold-point sign-offs, and determine whether the subgrade conditions encountered during construction deviated materially from the tender-phase data in a way that was documented at the time. Fourth, check the multi-trade interface: map every trade that operated in the affected area after your demobilisation and retrieve every handover docket that transferred possession of your structures to the next contractor in sequence. Only after working through that stack — and only after locating your baseline geotechnical reports and practical completion handover dockets from the specific electrical package interface and cross-referencing those documents against the exact timeline of the alleged failure — should you issue any formal response to the head contractor's defect notice. The order in which you do these things matters as much as the things themselves. FAQs Can I appeal a QBCC direction to rectify, and on what grounds? Yes, a direction to rectify issued under section 72 of the QBCC Act can be challenged, but the pathway and grounds differ depending on the stage at which you intervene. Before a formal direction is issued, the most effective intervention is to place before the QBCC inspector a comprehensive technical rebuttal — including geotechnical evidence, interface sign-offs, and a chronology of site activity by other trades — during the response window the regulator typically provides prior to formalising a direction. Once a direction has been formally issued, the primary review pathway is an application to the Queensland Civil and Administrative Tribunal (QCAT) under the QBCC Act's internal review and external review framework. In an external review before QCAT, the contractor can challenge both the factual basis of the direction (arguing the work was not defective, or that the defect was caused by another party) and the procedural validity of the direction (arguing, for example, that the six-and-a-half-year time bar had elapsed or that the direction was issued without adequate investigation of the contractor's response). Given that QCAT proceedings carry their own costs and timing risks, the most commercially effective strategy is almost always to prevent the direction from being formalised in the first place by engaging substantively with the QBCC during the pre-direction response window. You should obtain independent legal advice before deciding whether to pursue internal review, external review, or both. What happens if the QBCC inspector disagrees with my geotechnical rebuttal? If the QBCC inspector reviews your technical rebuttal and proceeds to issue a formal direction to rectify despite it, you are not without further recourse, but your options narrow significantly. The inspector is not required to accept your geotechnical expert's opinion over the evidence before them, and the QBCC is not bound to resolve a contested technical dispute in the contractor's favour simply because a plausible alternative explanation has been advanced. Where the inspector proceeds, you must immediately assess two parallel tracks. The first is the QCAT review pathway described above, which allows a merits review of the direction and is the most direct challenge to the regulatory finding. The second is your contractual dispute resolution pathway against the EPC head contractor, which may now run concurrently with the QCAT proceeding. It is critical to understand that complying with a QBCC direction does not automatically extinguish your right to recover the cost of that rectification from the EPC contractor through arbitration or litigation if you can subsequently establish that the defect was caused by a latent geotechnical condition or by another trade's overloading of your structures. Compliance with a regulatory direction and pursuit of cost recovery through the contractual mechanism are not mutually exclusive, and in some circumstances complying promptly while reserving your commercial rights in writing is the most defensible commercial position available. Does my defect liability end when the 12-month DLP expires? No, the expiration of a Defect Liability Period (DLP) does not extinguish your exposure to latent defect claims. Under section 10(1)(a) of the Limitation of Actions Act 1974 (Qld), an action founded on simple contract, quasi-contract or on tort (where the damages claimed do not consist of or include damages in respect of personal injury) shall not be brought after the expiration of 6 years from the date the cause of action arose. This means a principal may still bring a breach of contract claim against you for latent defects for up to six years from when the cause of action accrued. Importantly, section 10AA of the same Act can extend this period where the claimant was not aware, and could not reasonably have been aware, of the facts giving rise to the claim — a provision that EPC contractors may invoke in respect of concealed defects such as subsurface compaction failures or underground foundation defects. You should obtain legal advice on whether section 10AA may operate to extend your exposure beyond the standard six-year period on the specific facts of your matter. How long does the QBCC have to issue a direction to rectify defective civil work? The regulator's power is strictly time-barred at six years and six months from the completion of the work. Under section 72A(4) of the QBCC Act, a direction to rectify cannot be given more than 6 years and 6 months after the building work was completed or left in an incomplete state. The QBCC may apply to QCAT to extend this period in exceptional circumstances, though such extensions are rarely granted in practice. After this period has elapsed without an extension, the EPC contractor must ordinarily rely solely on commercial litigation pathways. What happens if the head contractor demands I fix a defect but won't let me access the solar farm? Being denied site access by the principal can support a defence against regulatory non-compliance, and the primary statutory basis for this is section 72(5) of the QBCC Act, which provides that the commission is not required to give a direction where it would be unfair to the contractor in the circumstances. The Act itself identifies an owner's refusal to allow a contractor to return to site as an example of such unfairness, and the QBCC's own Regulatory Guide confirms this position. Section 74 of the QBCC Act contains separate defences relating specifically to licence authorisation matters and does not directly address site access scenarios. Broader common law and contractual impossibility arguments may also be available in support but are secondary to the section 72(5) ground. You should formally document any refusal of access in writing to preserve all available arguments. Can a civil foundation failure be defended as a latent condition instead of defective work? Yes, contractors often attempt to pivot a defect claim by arguing the failure resulted from unforeseen soil reactivity rather than substandard workmanship. However, the enforceability of this defence depends heavily on the bespoke subcontract's allocation of geotechnical risk. You typically must issue a formal latent condition notice strictly within the 7 to 14-day contractual time bar to preserve this argument. Am I liable for structural defects caused by other trades overloading my foundation pads? You may be able to quarantine your liability if you can prove the subsequent trade caused the damage. Executed interface sign-offs and handover dockets can be relied on as evidence to demonstrate that the concrete pads were compliant when the electrical BoP contractor took possession. Without contemporaneous records, courts may hold you proportionately liable for the failure. Can a civil works defect lead to a workplace health and safety prosecution? Yes, severe structural defects that endanger health and safety can trigger regulatory investigations under the Work Health and Safety Act 2011 (Qld). Section 26(2) requires that you ensure, so far as is reasonably practicable, that the way in which a structure is constructed ensures it is without risks to the health and safety of persons. This ongoing statutory duty operates independently of any contractual defect liability periods. This guide is for informational purposes only and does not constitute legal advice. For advice tailored to your specific circumstances, please contact Merlo Law

Key Takeaways Errors of contract interpretation are rarely enough: The Supreme Court of NSW typically protects adjudicator determinations containing errors of law unless they escalate to a jurisdictional error, such as a denial of natural justice or apprehended bias. The bias threshold is exceptionally high: Mere familiarity with previous project disputes or unilateral criticism of an adjudicator by a respondent does not automatically satisfy the "fair-minded lay observer" test for apprehended bias. Determinations can be severed, not entirely voided: Under section 32A of the Building and Construction Industry Security of Payment Act 1999 (NSW), inserted by amending legislation assented to in 2018 and commenced by proclamation in 2019, the Court may identify and sever the portion of a determination affected by jurisdictional error while enforcing the remainder of the sub-consultant's payment award. Proactive payment schedule drafting is your primary defence: Because Supreme Court review is difficult and costly, architects must front-load jurisdictional boundaries and clearly articulate sub-consultant coordination failures within the statutory payment schedule timeframe. The email from the Authorised Nominating Authority lands in your inbox, containing an adjudication determination that orders your practice to pay a structural engineer for out-of-scope redesign variations. As you read the adjudicator's reasons, you realise they have completely misunderstood the coordination obligations set out in your sub-consultant agreement. Worse, the redesigns they just awarded payment for were actually required to rectify the engineer's own detailing errors. Your immediate commercial instinct is to attack the decision—surely an adjudicator who ignores the contract and rules in favour of a defective sub-consultant is biased or incompetent enough to have their decision quashed. However, overturning a statutory adjudication is not simply a matter of appealing a bad outcome. Before you instruct lawyers to challenge the decision, you must understand how the New South Wales Supreme Court defines reviewable error, the exceptionally high threshold for proving apprehended bias, and why your payment schedule remains the only reliable frontline defence against consultant claims. Receiving the Sub-Consultant's Adjudication Determination: Initial Assessment and Timelines You are now holding a determination that creates an immediate, enforceable statutory debt against your practice. Before you begin preparing an attack on the adjudicator's competence or impartiality, you must separate your frustration over an unfair commercial outcome from what the law actually defines as a reviewable error. This section clarifies the procedural threshold for challenging a decision and the strict financial timelines that continue to run while you consider your options. Separating Non-Reviewable Errors of Contract Interpretation from Jurisdictional Error When an adjudicator misinterprets an architectural sub-consultant agreement—such as failing to recognise that the engineer bore the design coordination risk—it is undeniably an error of law. However, under the rapid interim framework of the security of payment scheme, adjudicators are generally permitted to get the facts and the law wrong without their decisions being invalidated. The fundamental hurdle for practice principals wanting to challenge a determination is that ordinary errors of contract interpretation are rarely reviewable. Has an adjudicator fundamentally misunderstood your sub-consultant agreement? Do not wait for a statutory demand to crystallise; instruct our team to forensically review the determination for genuine jurisdictional errors before your financial exposure escalates. Under the Building and Construction Industry Security of Payment Act 1999 (NSW), an adjudicator's error in interpreting a sub-consultant agreement does not automatically render the determination void; a Supreme Court challenge must establish a genuine jurisdictional error. The Supreme Court exercises its supervisory jurisdiction to review and quash decisions affected by jurisdictional error through proceedings in lieu of prerogative writs, a power preserved under section 69 of the Supreme Court Act 1970 (NSW). A jurisdictional error occurs when an adjudicator acts outside their statutory authority—for instance, by failing to provide procedural fairness, exhibiting apprehended bias, or failing to address the matters they are required to consider. It is likely that a simple misreading of your sub-consultant coordination clauses will not satisfy this strict test, leaving the determination enforceable. The Adjudicator's Statutory Mandate Under Section 22 To assess whether an adjudicator has committed a reviewable error, it is necessary to examine what they are actually required to do. Under section 22 of the Building and Construction Industry Security of Payment Act 1999 (NSW), the adjudicator is statutorily tasked with determining the amount of the progress payment payable to the claimant, the date on which that amount became or becomes payable, and the rate of interest payable on that amount. The adjudicator performs this function by considering the provisions of the Act, the construction contract (in this context, the sub-consultant agreement), the payment claim together with all submissions duly made by the claimant in support of the claim, the payment schedule together with all submissions duly made by the respondent in support of the schedule, and the results of any inspection carried out by the adjudicator of any matter to which the claim relates. If the adjudicator genuinely assesses these materials and calculates an amount—even if their reasoning is heavily flawed or commercial architects would view it as objectively incorrect—they have generally satisfied their statutory mandate. The rapid nature of the scheme prioritises cash flow over perfect legal accuracy. Navigating the Supreme Court Review Timeline Filing an application for review in the Supreme Court does not magically freeze your obligation to pay the sub-consultant. Seeking an injunction to restrain the engineer from enforcing the statutory debt requires independent legal steps. Architects who wish to mount a challenge while simultaneously navigating the procedural pathways of the NSW security of payment scheme will typically need to pay the disputed adjudicated amount into court, or provide a bank guarantee as security, while the review is pending. If you fail to secure a stay of enforcement, the sub-consultant can obtain a judgment debt and enforce it, meaning the funds will leave your practice account long before a judge ever reviews the adjudicator's conduct. Establishing Apprehended Bias in Supreme Court Proceedings If you elect to commence proceedings under the Supreme Court's supervisory jurisdiction, the evidentiary burden shifts entirely onto your practice. Establishing that an adjudicator's handling of your sub-consultant's claim was infected by apprehended bias requires far more than proving they made an unreasonable decision or ignored your submissions. This section outlines the strict common law threshold you must meet to convince a court that the adjudicator lacked impartiality. Applying the Fair-Minded Observer Test to Adjudicator Conduct The foundational test for apprehended bias does not ask whether the adjudicator was actually biased; it asks whether an independent, reasonable person would suspect they were. Because security of payment adjudications are intended to be rapid and commercially pragmatic, courts may afford adjudicators significant procedural leeway. An adjudicator who uses blunt language, dismisses weak arguments aggressively, or requests targeted clarifications may still be acting within their authority, provided they do not demonstrate a predetermined position. What practitioners observe repeatedly in NSW is that Authorised Nominating Authorities operate from relatively small panels of experienced adjudicators, and certain adjudicators develop a working familiarity with specific project types, procurement structures, or even recurring parties. When a services engineer regularly pursues claims on mixed-use residential developments, the same adjudicator may appear more than once across different claim cycles on related projects. The ANAs are not obliged to appoint a different adjudicator simply because a respondent objects to prior project exposure, and in practice, objections lodged with the ANA at the appointment stage are rarely successful unless they identify a conflict that falls squarely within the adjudicator's own disclosure obligations. The Supreme Court's position reflects this commercial reality: a respondent who has been on the losing end of a prior determination before the same adjudicator — even on a factually similar claim — cannot convert that outcome into a bias ground without demonstrating something far more pointed than professional familiarity or a track record of adverse rulings. The "fair-minded lay observer" in this context is taken to understand that fast-track adjudication operates differently from curial proceedings, and that panel concentration is an inherent feature of the scheme rather than evidence of institutional partiality. In New South Wales, establishing apprehended bias requires demonstrating that a fair-minded lay observer might reasonably apprehend that the adjudicator did not bring an impartial mind to the resolution of the payment dispute. For architectural practices engaging NSW building and construction lawyers to assess a potential challenge, the advice is likely to centre heavily on whether the adjudicator's conduct crossed the line from robust, fast-track decision-making into a genuine denial of procedural fairness. At Merlo Law, we frequently see architectural practices blindsided by the speed and brutality of SOPA enforcement across NSW and QLD. We help commercial practices immediately assess the viability of these challenges by forensically reviewing the adjudicator's correspondence and procedural directions. By mapping your precise legal standing against the realities of the fair-minded observer test, we secure your commercial position before you commit to expensive litigation. Unilateral Criticism and Previous Dispute Rulings Example: Consider a scenario where an architectural practice previously lost an adjudication to a services engineer. During that process, the architect fiercely criticised the adjudicator in correspondence for fundamentally misunderstanding the role of the primary design consultant. Six months later, the same engineer lodges a new adjudication application with an Authorised Nominating Authority approved under the NSW security of payment scheme, and the Nominating Authority appoints the same adjudicator. If the adjudicator again rules in favour of the engineer, the architect might assume the decision is tainted by retaliatory bias. However, applying orthodox apprehended bias principles confirmed in Crowley Australia Pty Ltd v Latitude 63 LLC [2026] NSWSC 130 — a case decided by the NSW Supreme Court under cross-vesting arrangements in respect of a Northern Territory security of payment adjudication, in which apprehended bias was raised as a secondary ground of challenge and rejected on the basis of settled common law authority including Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 — a court is unlikely to find apprehended bias based solely on the respondent's unilateral prior criticism or the adjudicator's previous rulings against them on the same project. The primary ratio of Crowley concerned whether a post-termination claim for the return of bank guarantee proceeds constituted a valid payment dispute within the Northern Territory security of payment regime, and the apprehended bias reasoning should be understood as confirmatory of existing doctrine rather than as the principal holding of the case. Because Crowley concerned a Northern Territory security of payment adjudication heard in the NSW Supreme Court under cross-vesting arrangements, practitioners should note that the NT statutory framework differs from the NSW SOPA in certain respects, including the applicable definitions and enforcement provisions. The apprehended bias analysis, however, applied settled common law principles that are jurisdiction-neutral, and the reasoning on the fair-minded lay observer test is directly applicable to NSW adjudications. Identifying Genuine Financial Interest and Threats While prior rulings and robust case management rarely constitute apprehended bias, the threshold is often enlivened when the adjudicator's personal interests intrude upon the statutory process. If an adjudicator demonstrates a pecuniary interest in the outcome, they trigger a clear jurisdictional error. For example, in Quickway Constructions Pty Ltd v Hick [2017] NSWSC 830, the adjudicator had been made a defendant in separate Supreme Court proceedings brought by one of the parties (Quickway) seeking to quash his earlier determinations. Because those proceedings exposed the adjudicator to a potential costs order against him personally, the Court found he had a personal financial interest in their outcome that was adverse to Quickway. That interest, combined with adverse rulings he had already made against Quickway and his own preliminary ruling on the question of his bias without initially notifying the parties, was sufficient to give rise to apprehended bias. Conduct of that kind — where the adjudicator's own financial or legal exposure becomes entangled with the dispute before them — fundamentally breaches the impartiality expected of decision-makers. In such circumstances, a complaint to the Law Society of New South Wales may be appropriate if the adjudicator is a legal practitioner, but the immediate priority remains seeking Supreme Court intervention to quash the tainted determination. The Severability Trap Under Section 32A of the SOPA Even if your legal team successfully establishes that the adjudicator's treatment of a specific redesign variation was infected by jurisdictional error, the battle is not entirely won. The amendments to the SOPA introduced by the Building and Construction Industry Security of Payment Amendment Act 2018 (No 78), which commenced by proclamation in 2019, equipped the Supreme Court with a statutory mechanism that can severely limit the commercial value of your victory. This section explains how the Court can preserve the unaffected portions of a sub-consultant's payment award, reducing the strategic leverage of an appeal. The Supreme Court's Discretionary Power to Set Aside When the Supreme Court identifies a jurisdictional error, it is not compelled to automatically void the entire determination. The intervention power is discretionary. Under section 32A(1) of the Act, the Court must actively decide what orders are appropriate to remedy the specific error identified. If the error only relates to a discrete portion of the adjudicator's reasoning—such as an incorrect application of the rules to one specific engineering variation—the Court has the statutory flexibility to address that flaw without unwinding the entire statutory debt. Section 32A of the Building and Construction Industry Security of Payment Act 1999 (NSW) grants the Supreme Court the discretionary power to set aside the whole or any part of an adjudicator's determination if it finds that a jurisdictional error has occurred. Unlike substantive building disputes between homeowners and contractors heard before the NSW Civil and Administrative Tribunal (NCAT) under the Home Building Act 1989 (NSW), the Supreme Court's role in reviewing adjudication determinations is purely supervisory. It does not remake the decision or recalculate the fees; it simply determines whether the adjudicator had the authority to make the decision they made, and if not, how much of that decision must be set aside. Severing the Affected Portion of the Determination The application of section 32A(2) fundamentally alters the risk profile for respondents. Rather than voiding the entire determination, the Supreme Court can sever the specific part affected by jurisdictional error and uphold the valid portions of the adjudicator's award. If an adjudicator makes a reviewable error regarding a $20,000 redesign variation but correctly calculates the remaining $80,000 of the sub-consultant's claim, the Court may isolate and quash the $20,000 portion. This means the architect is likely to remain liable for the $80,000 statutory debt. Before the severability amendments, the threat of Supreme Court proceedings carried genuine commercial weight. A respondent who identified even a single arguable jurisdictional error could use the prospect of a full quashing to drive settlement negotiations — the sub-consultant faced the possibility of walking away with nothing and restarting the process. That leverage has been substantially eroded. Sophisticated claimants, and the solicitors who advise them on consultant-side briefs, are acutely aware that their core claim — the undisputed portions of the payment schedule — will almost certainly survive any challenge. What this means in practice is that the threat of Supreme Court proceedings is now most credible where the jurisdictional error infects the whole of the adjudicator's analysis, rather than a discrete variation item. If you are dealing with an adjudicated amount where the contaminated reasoning touches only a single line item, the sub-consultant's solicitors will call your bluff, and the economics of proceedings will rapidly favour settlement at a modest discount. Practitioners who have run these matters through to hearing will tell you that the costs of a contested Supreme Court application — including interlocutory injunction applications and security for the adjudicated amount — routinely approach or exceed the value of the severable portion, which is precisely why robust payment schedule drafting must do the work that appeals cannot. Consequently, the strategic deployment of Calderbank offers — formal written settlement offers that carry costs consequences if the receiving party fails to beat the offer at hearing — during Supreme Court proceedings must be carefully calibrated to account for the likelihood that the sub-consultant may still secure partial enforcement of the determination. If the architect's Calderbank offer accurately predicts the severed outcome, the sub-consultant may be ordered to pay the architect's costs from the date the offer was served. However, if the offer is set too aggressively and the sub-consultant retains more than the offered amount after severance, the costs protection is lost. Practitioners should factor the likely post-severance enforceable amount into any offer, rather than pitching the offer on the assumption that the entire determination will be quashed. Facing a determination that blends legitimate variations with blatant jurisdictional errors? Request an urgent review from our senior team to calculate your true post-severance exposure and deploy a strategically calibrated settlement offer to protect your practice. The Commercial Viability of Commencing Proceedings The severability mechanism forces architectural practices to undertake a brutal commercial risk calculation before commencing proceedings. Engaging in Supreme Court litigation is notoriously expensive, and the prospect of severance means you may spend tens of thousands of dollars on legal fees only to have a portion of the determination quashed, leaving you to pay the balance of the sub-consultant's claim plus your own costs. The insolvency exposure in this context deserves direct attention because it is consistently underestimated by practice principals who view a Supreme Court appeal as a commercially neutral holding position. A statutory demand founded on an adjudicated amount carries the same machinery as any other statutory demand — once served, your practice has 21 days to apply to set it aside or pay the debt, and the grounds for setting aside a demand based on an adjudicated amount are narrow. An adjudication determination that has been converted to a judgment debt is not the same as a genuinely disputed debt, and courts have generally been reluctant to set aside statutory demands where the underlying amount was the product of a statutory process the respondent participated in. The practical consequence is that if your practice cannot fund payment of the un-severed portion into court while the appeal runs, the sub-consultant can pursue winding up proceedings even while a Supreme Court challenge is on foot. For sole-director architectural practices carrying project-specific cash flow, this is not a theoretical risk — it is the scenario that forces commercially driven settlements well before any judge reviews the adjudicator's conduct. Furthermore, while you are pursuing an appeal that may only partially succeed, the preserved portion of the determination remains an enforceable debt. Failure to pay the un-severed amount creates a separate exposure channel, as the sub-consultant can obtain a judgment debt and issue a statutory demand, triggering potential insolvency proceedings against your practice long before the general timelines under the Limitation Act 1969 (NSW) (AustLII) expire. To make this exposure concrete, consider the enforcement sequence that unfolds once the adjudicator's determination is issued. First, the sub-consultant requests an adjudication certificate from the Authorised Nominating Authority under section 24 of the Act. That certificate is then filed as a judgment for a debt in a court of competent jurisdiction under section 25, at which point it has the same force as if the court had originally ordered payment. The sub-consultant can then serve a statutory demand under section 459E of the Corporations Act 2001 (Cth), requiring your practice to pay the judgment debt within 21 days. If you fail to pay or to successfully apply to set aside the statutory demand within that 21-day window, the sub-consultant can file a winding-up application on the basis that your practice is presumed to be insolvent. This entire sequence — from adjudication certificate to winding-up application — can unfold in a matter of weeks, well before a contested Supreme Court review reaches a hearing. Front-Loading Your Defence Against Sub-Consultants in the Payment Schedule Because challenging an adjudication determination in the Supreme Court is an uphill, expensive battle fraught with severability risks, your primary defensive posture must be established long before an adjudicator is appointed. This section explains why the payment schedule is where practice principals must lock in their jurisdictional boundaries and definitively reject unfounded variation claims from structural and services engineers. Documenting Coordination Failures Versus Design Changes If your architectural practice intends to reject a sub-consultant's claim for redesign variations, the specific reasons must be comprehensively detailed in the payment schedule within the tight statutory timeframe. If the engineer's redesign was necessary to rectify their own detailing errors or failure to coordinate with the primary architectural model, rather than representing a compensable change in client scope, this distinction must be explicitly stated. Relying on vague assertions or generic rejections prevents the adjudicator from understanding the contractual allocation of risk and effectively removes your ability to rely on those arguments later. To illustrate the difference, compare the following two payment schedule responses to an identical claim by a structural engineer for $45,000 in redesign variations: A poorly drafted response might state: "The claimed redesign variations are rejected. The structural engineer's work was deficient and no additional payment is warranted." A robust response would state: "The respondent withholds payment of $45,000 claimed under variation items 3, 7 and 12. Each of these items relates to redesign work necessitated by the claimant's failure to coordinate its structural detailing with the architectural model issued under transmittal T-041 dated 15 January 2026, in breach of clause 4.3(b) of the Sub-Consultant Agreement dated 1 September 2025. Specifically, variation item 3 ($18,000) relates to the redesign of the Level 2 transfer beam connection, which the claimant detailed to a superseded architectural grid that had been updated in Revision C of the architectural drawings issued on 3 December 2025. The claimant acknowledged receipt of Revision C by email on 5 December 2025. This work does not constitute a compensable variation under clause 9.1 of the Sub-Consultant Agreement because it was required to rectify the claimant's own coordination failure, not a change in the client's scope of works." The first response gives the adjudicator nothing to work with and, critically, may prevent the architect from expanding on those reasons in its adjudication response submissions. The second response locks in the contractual clause, identifies the specific transmittal and revision history, and draws the distinction between a coordination failure and a compensable scope change — precisely the factual matrix the adjudicator needs to rule in the respondent's favour. In New South Wales, an architect's primary opportunity to defend against a sub-consultant's payment claim under the SOPA framework is by providing comprehensive reasons for withholding payment within a validly issued payment schedule. Ensuring you issue a valid payment schedule requires strict adherence to the business day calculation rules prescribed under the Act. Failing to provide detailed reasons within this period strips you of your primary evidentiary foundation and drastically increases the likelihood of an adverse, yet legally unassailable, adjudication outcome. The reason this statutory deadline is so unforgiving is that the adjudicator's jurisdiction to consider the respondent's defence is confined to the reasons included in the payment schedule. Under section 22(2)(d) of the Act, the adjudicator considers the payment schedule together with all submissions duly made by the respondent in support of the schedule. If a reason for withholding payment is not articulated in the payment schedule itself, the respondent cannot introduce that reason for the first time in its adjudication response. This means that an architect who fails to state in the payment schedule that a redesign was caused by the engineer's coordination failure — rather than a client-directed scope change — is procedurally barred from raising that argument before the adjudicator, regardless of how strong the underlying evidence may be. This rigid procedural barring is exactly why our frontline advisory work focuses heavily on proactive contract administration. We partner with commercial architects to draft watertight, jurisdictionally sound payment schedules that aggressively ring-fence sub-consultant coordination failures. By embedding our legal strategy into your monthly certification cycles, we neutralise baseless variation claims before an adjudicator ever sees them. Avoiding Scope Expansion in the Payment Schedule Warning: Drafting a payment schedule requires precision; introducing irrelevant grievances or broad contractual disputes can inadvertently expand the adjudicator's jurisdiction beyond the scope of the original payment claim. Adjudicators often commit reviewable jurisdictional errors when they determine matters that were never properly raised, but if an architect's poorly drafted schedule introduces those issues, it may validate the adjudicator's broader assessment. Consequently, an overly expansive payment schedule may inadvertently destroy a viable ground for appeal by implicitly authorising the adjudicator to rule on matters that should have remained outside the adjudication. Architects should review relevant construction law publications and consider seeking independent legal advice to ensure their payment schedules are tightly drafted. To mitigate exposure when defending against consultant claims, contact Merlo Law for early dispute strategy. Furthermore, ensuring that coordination disputes remain focused on contractual performance rather than escalating into broader site-wide design liability issues is critical. An overly broad payment schedule that introduces allegations about site safety or regulatory non-compliance — matters that fall outside the sub-consultant's payment claim — risks inviting the adjudicator to make findings on issues you never intended to put in play, while simultaneously diluting the specificity of your contractual defence. Conclusion Receiving an adjudication determination that awards payment to a sub-consultant for redesign work necessitated by their own detailing errors is intensely frustrating for any architectural practice. The immediate impulse to challenge the decision based on perceived adjudicator bias or incompetence is understandable, but legally fraught. As we have established, the Supreme Court of New South Wales requires proof of a genuine jurisdictional error—such as a breach of natural justice or apprehended bias under the strict "fair-minded lay observer" test—before it will intervene. Mere errors of contract interpretation, or unilateral dissatisfaction with an adjudicator's past rulings, are rarely sufficient to quash a determination. Furthermore, the introduction of the severability mechanism under section 32A of the SOPA means that even a successful appeal may result in the Court severing only the tainted portion of the decision, leaving your practice liable for the remainder of the statutory debt. This commercial reality underscores the futility of relying on Supreme Court reviews as a primary dispute resolution strategy. Your most effective defence against unjustified sub-consultant claims must be deployed long before an adjudicator is appointed. Review your internal contract administration processes today, and ensure that your project architects are equipped to draft robust, timely, and highly specific payment schedules that lock in the jurisdictional boundaries of every dispute. FAQs What is the difference between an error of law and a jurisdictional error in an adjudication? An error of law occurs when an adjudicator misinterprets a contract or misapplies a legal principle, which is generally not reviewable under the interim SOPA framework. A jurisdictional error occurs when the adjudicator acts outside their statutory authority, such as denying natural justice or exhibiting apprehended bias. In New South Wales, the Supreme Court typically only intervenes to quash determinations infected by genuine jurisdictional error. Can an adjudicator's misunderstanding of an architect's coordination role be appealed? Usually, no. If the adjudicator considers the relevant sub-consultant agreement and the submissions but simply misinterprets the architect's design coordination responsibilities, this is generally classified as a non-reviewable error of law. Unless the misinterpretation amounts to a failure to perform their statutory mandate, the Supreme Court is unlikely to set the determination aside. Does an adjudicator's involvement in a previous project dispute prove apprehended bias? No, prior involvement alone is typically insufficient. The threshold for apprehended bias requires demonstrating that a fair-minded lay observer might reasonably apprehend that the adjudicator lacked impartiality. Familiarity with the project or the parties—or even unilateral criticism from a respondent in a past dispute—does not automatically satisfy this strict common law test. What happens if the Supreme Court finds a jurisdictional error in only one part of a determination? Under section 32A(2) of the Building and Construction Industry Security of Payment Act 1999 (NSW), the Supreme Court has the discretionary power to sever the specific portion of the determination affected by the error. The Court may quash the tainted part while confirming the remainder of the sub-consultant's adjudicated payment award, which then remains enforceable through the Act's separate enforcement provisions. Does lodging a Supreme Court appeal stop the requirement to pay the sub-consultant? No, commencing review proceedings does not automatically operate as a stay on the enforcement of the determination. Architects will often need to seek an injunction and may be required to pay the disputed adjudicated amount into court, or provide security, while the Supreme Court reviews the matter. Why is the payment schedule so critical when defending against a sub-consultant claim? Because challenging a determination in the Supreme Court is difficult and costly, the payment schedule is the primary mechanism for an architect to establish their jurisdictional boundaries and detail the reasons for withholding payment. Failing to explicitly state that a redesign was required due to a sub-consultant's coordination failure within the statutory timeframe removes the foundation of your defence. This guide is for informational purposes only and does not constitute legal advice. For advice tailored to your specific circumstances, please contact Merlo Law

Key Takeaways A holding company may be liable for a subsidiary’s debts if there were reasonable grounds for suspecting the subsidiary’s insolvency and the holding company, or one or more of its directors, was aware of those grounds, or it was reasonable to expect that awareness. The Corporations Act 2001 (Cth) provides four key statutory defences for holding companies facing liability under section 588V, through section 588X, focusing on reasonable grounds for expecting solvency, reasonable reliance on a competent and reliable person, genuine non-participation in management for good reason, or taking all reasonable steps to prevent the debt. The safe harbour regime provides a separate form of protection where directors are actively developing a course of action reasonably likely to lead to a better outcome than immediate administration or liquidation. For directors, the key provision is section 588GA, and for holding companies there is parallel protection under section 588WA. Meticulous, contemporaneous documentation is critical to supporting any of these defences, including where a claim is brought by a liquidator or the Australian Securities and Investments Commission (ASIC). The Australian construction landscape, particularly in Queensland, is a high-stakes environment. Developers frequently leverage sophisticated corporate structures, using Special Purpose Vehicles (SPVs) or subsidiary companies for individual projects to isolate risk. In theory, the corporate veil protects the parent (or holding) company from the financial distress of its subsidiary. However, this protection is not absolute. When a subsidiary project company faces insolvency, the holding company itself may, in some circumstances, be liable for debts incurred by the subsidiary under the insolvent trading provisions of the Corporations Act 2001 (Cth). That upstream exposure represents a significant risk for developers and their holding companies, particularly where warning signs are not identified and addressed early. The statistics paint a sobering picture. The construction industry consistently represents the largest share of corporate insolvencies in Australia, accounting for a staggering 26-27% of all failures in recent financial years. The number of construction firms entering administration or liquidation has seen a sharp increase, rising to 3,217 in 2024. Crucially, ASIC consistently reports that insolvent trading is the most common form of misconduct alleged in this sector. For directors of a parent development company, these are not just numbers; they highlight the seriousness of insolvency risk within corporate group structures and the importance of early oversight and advice. The Unique Focus of This Guide This article is not merely an explanation of the law; it is a practical playbook for directors. We will first outline the specific legal test used to establish a holding company’s liability for a subsidiary’s debts. We will then transition to a deep dive into the specific statutory defences available in that context under the Corporations Act. Finally, and most importantly, we will detail how to proactively build a case for those defences through meticulous documentation and robust corporate governance. While the risk of holding company liability is significant, the law provides specific shields for diligent directors. This guide is focused on defence and mitigation, shifting the mindset from passive risk awareness to proactive strategic preparation. Establishing Parent Company Liability: The Test Under Section 588V For liability to flow from a subsidiary to its parent company, a liquidator or ASIC must satisfy a specific legal test. Liability is not automatic; it hinges on the provisions of Section 588V of the Corporations Act. Understanding this threshold is the first step in building an effective defence against a potential insolvent trading claim. The corporate structures common in the property development sector, designed to navigate the complex web of construction law, are precisely what these provisions scrutinise. What is the Legal Threshold for Liability? Section 588V establishes a five-part test that must be satisfied for a holding company to be held liable for the debts of its insolvent subsidiary. All five conditions must be met: The Status Test: The parent company must have been the holding company of the subsidiary at the time the subsidiary incurred the specific debt in question. The Insolvency Test: The subsidiary must have actually been insolvent at that time, or have become insolvent by incurring that debt (or other debts at that time). The Suspicion Test: At that same time, there must have been "reasonable grounds for suspecting" that the subsidiary was insolvent, or would become insolvent by incurring that debt (or other debts at that time). The Awareness Test: Either the holding company or one or more of its directors was actually aware of those grounds for suspicion — or, having regard to the nature and extent of the holding company's control over the subsidiary's affairs, it was reasonable to expect that a holding company in its circumstances would have been so aware. The Timing Test: The debt must have been incurred at or after the commencement of the Corporations Act 2001. The term "reasonable grounds for suspecting" is critical. It's a lower bar than "knowing" or "expecting." A suspicion is more than idle speculation but falls short of a firm belief. The court will assess whether a reasonably competent director, looking at the available financial information, would have harboured a suspicion of insolvency. If you are second-guessing the solvency of a subsidiary project, do not wait for a liquidator's notice. Instruct our team to conduct an urgent, privileged review of your corporate structure to secure your commercial position. Understanding the "Awareness" Test: Actual vs. Objective Suspicion A common but serious mistake for directors is to assume that ignorance will provide a defence. The fourth condition under section 588V is satisfied not only by actual knowledge — it also has an objective element. It is not enough for a director to say they did not actually know or suspect insolvency; the court will also examine whether, having regard to the nature and extent of the holding company’s control over the subsidiary’s affairs and the information available, it was reasonable to expect that awareness. This means a director of a holding company cannot simply turn a blind eye to the financial health of a subsidiary and later claim they were unaware of any problems. The court will examine the information that was available to the parent company's board—management accounts, cash flow reports, board papers, and correspondence—and determine if those documents contained warning signs that should have triggered suspicion. Active oversight and a baseline of financial literacy are not optional; they are fundamental duties for any director involved in a holding company structure. The Four Core Defences: Your Shield Against an Insolvent Trading Claim The Corporations Act is not purely punitive; it provides specific statutory defences under section 588X, which applies directly in the holding company context. These defences recognise that corporate decision-making occurs in a complex commercial environment and do not impose a standard of infallibility. However, each defence requires proof of diligence, reasonableness, and active engagement. A holding company seeking to rely on one of these protections must be able to point to specific actions and evidence supporting the defence. Defence 1: Expecting Solvency on Reasonable Grounds The first and most commonly argued defence, found in s 588X(2), is that the holding company — and each of its relevant directors — had reasonable grounds to expect, and did expect, that the subsidiary was solvent and would remain solvent even after incurring the debt. This is an active defence. "Expecting" solvency requires more than just passive optimism or a vague hope that things will improve. A director must demonstrate that their expectation was based on a rational and informed assessment of the subsidiary's financial position. The process of forming this reasonable expectation involves actively seeking, reviewing, and questioning financial information. Evidence that can be used to substantiate this defence includes: Detailed and up-to-date cash flow forecasts showing a capacity to meet future obligations. Regular profit and loss statements and balance sheets. Evidence of access to credit facilities or other sources of funding. Valuations of company assets that could be realised to pay debts. The key is that the director's expectation must have been reasonable at the time the debt was incurred. Hindsight is irrelevant. The court will place itself in the director's shoes and assess whether, based on the information available then, the belief in solvency was justifiable. Defence 2: Relying on a Competent and Reliable Person Under s 588X(3), the holding company — and each of its relevant directors — can argue that they had reasonable grounds to believe, and did believe, that a "competent and reliable person" was responsible for providing adequate information about the subsidiary's solvency, and that this person was fulfilling that responsibility. This defence acknowledges that directors, particularly in a large holding company, must rely on others. The "competent and reliable person" could be the subsidiary's Chief Financial Officer, an experienced financial controller, or an external accountant tasked with monitoring and reporting on the company's finances. However, the reliance must be reasonable. A director cannot simply delegate their oversight duties entirely. They must have made sufficient inquiries to satisfy themselves of the expert's competence and had no reason to doubt the information being provided. If the financial reports are clearly nonsensical or contradict other known facts, a director cannot blindly accept them. This defence is not a "get out of jail free" card for abdicating responsibility. You cannot wilfully ignore obvious red flags—like creditors constantly calling or suppliers demanding cash on delivery—and then blame the CFO for providing optimistic reports. The reliance must be in good faith and objectively reasonable. A director retains the ultimate duty to apply their own mind to the information presented. This is where seeking sound commercial legal advice can be a crucial step in testing the assumptions you are being asked to rely on. Defence 3: Justifiable Non-Participation in Management This is the narrowest of the four defences, and its operation in the holding company context — under s 588X(4) — is more limited than it first appears. Where a relevant director of the holding company did not take part in management at the time the debt was incurred due to illness or some other "good reason," that director's personal awareness of the grounds for suspecting insolvency is to be disregarded for the purposes of the section 588V liability test. In other words, it neutralises the awareness element attributable to that particular director — it does not, of itself, fully exonerate the holding company if the remaining conditions of section 588V are otherwise satisfied. Consider a director of a parent company who was legitimately incapacitated due to a serious illness and required hospitalisation for two months. During that period, the subsidiary incurred several large debts and subsequently failed. When a liquidator later pursues the holding company, the incapacitated director's awareness cannot be used to satisfy the awareness limb of section 588V — provided the absence is properly evidenced through medical records, formal leave of absence notifications, and board minutes recording their non-attendance. This provision is not available for directors who are simply disengaged, on an extended holiday without making arrangements, or who choose not to pay attention. The non-participation must be total and for a compelling, verifiable reason. Defence 4: Taking All Reasonable Steps to Prevent the Debt The final defence, under s 588X(5), is the last resort for a holding company that suspected its subsidiary was in trouble but took positive steps to stop it. This defence requires proof that the holding company itself took "all reasonable steps" to prevent the subsidiary from incurring the debt. Inaction is fatal to this defence. The court will look for evidence of positive action. "Reasonable steps" are context-dependent and will be assessed against the size and complexity of the company, but could include: Formally voting against resolutions to incur further debt. Expressing strong, documented dissent in board meetings and demanding it be minuted. Attempting to have the board appoint a voluntary administrator. Voicing concerns in writing to other board members. This defence is directed to those who recognised the seriousness of the position and took positive steps to prevent further debt being incurred, even if those steps were ultimately unsuccessful. Its practical application will depend heavily on the quality of the contemporaneous evidence available. In Queensland and New South Wales, we routinely advise parent companies on the exact steps required to isolate contagion from a failing subsidiary. Merlo Law acts decisively to document your dissent and enforce protective legal measures, ensuring your holding entity is not dragged down by a rogue project. Engage our team to implement immediate, aggressive risk-mitigation strategies before subsidiary debt spirals out of control. Proactively Building Your Defence: A Director's Documentation Playbook Understanding the statutory defences is one thing; being able to prove their requirements is another. In any legal challenge from a liquidator, ASIC, or another regulator or decision-maker, memory alone is a poor substitute for a clear, dated paper trail. Effective corporate governance and meticulous documentation are not merely administrative tasks; they may become critical evidence in support of a defence. Why Contemporaneous Records are Your Best Weapon From a court’s perspective, undocumented decisions, questions, and warnings are often much harder to prove later. Records created after the event to justify an earlier decision will usually carry less weight than contemporaneous notes, emails, and board minutes created at the time. When an insolvent trading claim is later examined, the quality of the contemporaneous record may be highly influential. The Anatomy of Defensible Board Minutes Board minutes are often among the most important pieces of evidence in an insolvent trading case. To be genuinely useful, they should go far beyond simple one-line resolutions. Well-prepared board minutes should provide a detailed record of the board’s oversight process. They must document: The Data Reviewed: A clear record of the key financial documents tabled and considered by the board (e.g., "The board reviewed the management accounts for the period ending 31 October, the aged creditors list, and the revised cash flow forecast to the end of the financial year."). The Questions Asked: The specific, probing questions asked by directors about the financial data. For example, "Director Smith questioned the CFO on the significant increase in the 90-day creditor balance and the assumptions underpinning the revenue forecast for the next quarter." The Advice Received: The answers and advice provided by management or external advisors in response to those questions. The Reasoning: The detailed reasoning behind the board's conclusion that the subsidiary remained solvent and that it was in the company's best interests to incur a specific debt. A simple resolution "that the company proceed with the contract" is weak; a resolution that explains why the board believes it can meet that obligation is strong. Board minutes are not an administrative chore; they are a legal shield. When we defend directors, the first documents we ask for are the minutes. Minutes that show robust debate, critical questioning of financial reports, and a clear, reasoned basis for decisions are invaluable. Vague, one-line resolutions offer almost no protection. Establishing a Cadence of Financial Scrutiny A one-off, detailed board meeting is not enough. To build a robust "reasonable grounds" defence, directors must demonstrate a consistent and disciplined process of financial scrutiny. This means establishing a formal cadence of reporting between the subsidiary and the parent company board. Parent company directors should be demanding, at a minimum: Monthly management accounts (Profit & Loss, Balance Sheet). Detailed cash flow projections, updated regularly and tested against actual performance. Aged creditor and debtor reports. Reports on compliance with statutory obligations like tax and superannuation. This regular flow of information does two things. First, it provides the raw data needed to make informed decisions. Second, it creates a paper trail that demonstrates a system of active oversight. This system is fundamental to proving that the directors were diligent and had a reasonable basis for their belief in the company's solvency. Unpacking the Safe Harbour Defence: A Modern Lifeline for Restructuring Beyond the four core defences in section 588X, the Corporations Act also provides a separate safe harbour regime for companies in financial distress. For individual directors of the subsidiary, the relevant provision is Section 588GA. For the holding company itself, protection from liability under Section 588V is accessed through the parallel provision at Section 588WA — which shields the holding company where it has taken reasonable steps to ensure Section 588GA applied to each of the subsidiary's directors in relation to the relevant debt. This regime was introduced to shift the legal incentive away from a premature rush to administration and instead encourage genuine, well-considered turnaround attempts. What is the Safe Harbour and How Does It Work? Safe harbour operates as a carve-out from insolvent trading liability in defined circumstances. It may protect directors from civil liability for debts incurred by a company that may be insolvent, provided they are actively developing a course of action that is reasonably likely to lead to a better outcome for the company than the immediate appointment of an administrator or liquidator. It allows directors breathing room to attempt a restructure, refinance, or orderly wind-down without the constant fear of personal liability for every new debt incurred during the process. Where those directors have the benefit of the safe harbour, the holding company can in turn rely on Section 588WA — provided it took reasonable steps to ensure that protection was in place. This interconnected structure is a key focus of the updated ASIC's Regulatory Guide 217, which acknowledges the commercial benefit of attempting a viable turnaround. Key Conditions for Safe Harbour Protection Entry into the safe harbour is not automatic. Directors must satisfy several strict prerequisites to gain its protection. The essential steps include: Maintaining Core Obligations: The company must be keeping its employee entitlements (including superannuation) paid up to date and must be complying with its tax reporting obligations. Developing a Plan: The directors must start developing one or more courses of action. Seeking Expert Advice: A crucial step is obtaining advice from an "appropriately qualified entity" – typically a registered liquidator, a specialist turnaround advisor, or a lawyer with expertise in restructuring. Documenting the Plan: While the statute does not prescribe documentation as a hard entry condition, it is a factor the court will have regard to in assessing whether a course of action was reasonably likely to lead to a better outcome. In practice, a well-documented plan outlining the steps to be taken and the reasoning behind them is essential to discharging the evidentiary burden — and its absence will significantly undermine any safe harbour claim. This process may involve navigating complex issues like security of payment legislation to ensure all liabilities are properly understood and factored into the turnaround strategy. A poorly documented safe harbour strategy is legally useless when a hostile liquidator comes knocking. Instruct Merlo Law to formalise your turnaround plan and aggressively defend your directors from personal liability. What Does a "Better Outcome" Look Like? The term "better outcome" is the lynchpin of the safe harbour defence. The comparison point is always the estimated financial return to creditors in an immediate formal insolvency process (i.e., administration or liquidation). The turnaround plan does not need to guarantee success or a return to profitability. It simply needs to be reasonably likely to provide a superior result for creditors than the alternative of pulling the plug immediately. Illustrative Example: A subsidiary construction company is facing a severe cash flow crisis due to a delayed project. Immediate liquidation would likely yield only 10 cents on the dollar for unsecured creditors, and all employees would lose their jobs. The directors engage a turnaround specialist. They develop a plan that involves negotiating with the principal on the delayed project, selling a non-core land asset to inject cash, and terminating construction contracts that are unprofitable. This plan, while carrying risks, is projected to allow the company to trade through its difficulties and eventually pay creditors an estimated 50 cents on the dollar. This projected improvement over the 10-cent liquidation return is the "better outcome" that the safe harbour is designed to facilitate. When a Defence Fails: Understanding the Consequences The defensive framework outlined in this guide is intended to reduce liability risk. However, if a holding company or relevant person cannot establish an available statutory defence in the applicable context, or safe harbour protection where available, the consequences can be serious. Understanding the powers of a liquidator and the corporate regulator, ASIC, underscores the importance of proactive governance. The Powers of a Liquidator and ASIC When a company is liquidated and a director is found to have engaged in insolvent trading, two key parties can take action: The Liquidator: Acting on behalf of creditors, a liquidator may bring proceedings in relation to insolvent trading and seek compensation for loss suffered as a result of debts incurred while the company was insolvent. In the holding company context, this may include proceedings against the holding company under the relevant provisions of the Corporations Act. ASIC: As the corporate regulator, ASIC has its own enforcement powers. Depending on the statutory pathway engaged, it may seek civil penalties, compensation orders, or disqualification orders. The scope of relief available will depend on the claim, the parties involved, and the provisions relied on. These serious outcomes highlight the high stakes involved. Navigating a complex claim, which may involve proceedings in the Queensland Civil and Administrative Tribunal (QCAT) for related building matters or the Federal Court for corporate law matters, requires the guidance of a specialist building and construction lawyer. The Final Word: Proactivity Is Critical The legal framework governing insolvent trading and related defences places a clear premium on proactive, engaged, and diligent corporate oversight. A close examination of the defences reveals that common theme. The defence of having reasonable grounds for expecting solvency requires active financial scrutiny and questioning. The defence of reasonable reliance requires a sound basis for trusting the information provided. The defence of taking all reasonable steps is explicitly concerned with proactive intervention. And the safe harbour regime is likewise premised on timely, documented efforts to develop a better outcome than immediate external administration. Passivity, disengagement, and the failure to respond appropriately to warning signs create significant risk under the Corporations Act 2001 (Cth). Accordingly, one of the most important practical protections in this area is a system of proactive governance, careful documentation, and a willingness to seek appropriate advice at an early stage. We encourage directors to review their governance processes in light of this information and seek specific advice where needed. Merlo Law has spent years defending QLD and NSW construction firms from aggressive liquidators and regulatory overreach. We do not just dispense academic advice; we deploy hard-hitting, commercial strategies designed to fiercely protect your parent company’s balance sheet. Secure your corporate structure today by instructing our senior lawyers to conduct a comprehensive legal audit of your operational subsidiaries. FAQs What is the difference between a holding company and a parent company? In the context of the Corporations Act, the terms are often used interchangeably. A company is considered a "holding company" of another company (the "subsidiary") under section 46 of the Corporations Act 2001 if it controls the composition of the subsidiary's board, is in a position to cast or control more than half of the votes at a general meeting, or holds more than half of the subsidiary's issued share capital (excluding share capital carrying no right to participate beyond a specified amount in a distribution of profits or capital). Importantly for developers using tiered SPV structures, a company is also a holding company of any entity that is itself a subsidiary of one of its subsidiaries — meaning liability under section 588V can travel up through multiple layers of a corporate structure. Does this liability apply to non-executive directors of the parent company? Non-executive directors are not immune from scrutiny in this context. While the statutory framework differs between direct insolvent trading claims and holding company liability, non-executive directors are still expected to be financially literate, to participate actively in board oversight, and to apply an independent mind to the financial information presented. They cannot simply defer to management or executive directors where warning signs are apparent. How soon should a director act if they suspect insolvency? Immediately. Once there are reasonable grounds for suspecting insolvency, delay increases legal and practical risk. The first step should be to raise the concern formally at board level, ensure the company’s financial position is urgently assessed, and obtain prompt professional advice from an appropriately qualified lawyer, insolvency practitioner, or accountant. Can a director resign to avoid liability for insolvent trading? Not usually. Resignation does not wipe out potential liability for debts incurred while the person was still a director, because section 588G of the Corporations Act 2001 (Cth) turns on whether the person was a director at the time the company incurred the debt. If the relevant debts were incurred before the resignation took effect, a later resignation will not, by itself, avoid exposure. However, where a person has genuinely ceased to be a director, liability under section 588G will not usually arise for debts incurred only after that point. In practice, a former director is more likely to face continuing risk only where there is some additional complication — for example, the resignation was ineffective, the resignation date is disputed, ASIC was not properly notified, or the person continued to act in the affairs of the company in a way that may leave them characterised as a director despite the resignation. So the practical position is that resignation is not a clean escape from liability for past debts, but nor does it ordinarily make a former director liable for future debts once they have genuinely left office. If resignation is being considered because of solvency concerns, the director should raise those concerns formally, record any dissent and steps taken to prevent further debts, obtain urgent legal or insolvency advice, ensure the resignation is validly effected and properly notified, and avoid continuing to act in management after resigning. What is the difference between administration and liquidation? Voluntary administration is a process where an independent administrator takes control of the company to try and find a way to save the company or its business. The goal is restructuring and rescue. Liquidation (or 'winding up') is the formal process of ending the company's existence, selling its assets, and distributing the proceeds to creditors. It is a terminal process. The "better outcome" in the safe harbour provisions is measured against the likely return in an immediate administration or liquidation. Does the Queensland Building and Construction Commission (QBCC) get involved in insolvent trading? While insolvent trading is primarily governed by the federal Corporations Act and enforced by ASIC and liquidators, the QBCC has a strong interest in the financial viability of licensees. An insolvency event can be grounds for the QBCC to take disciplinary action, including licence cancellation or exclusion of individuals from the industry, under the Queensland Building and Construction Commission Act 1991. This guide is for informational purposes only and does not constitute legal advice. For advice tailored to your specific circumstances, please contact Merlo Law.

Key Takeaways A novation is not a mere assignment of rights. It substitutes a new contractual relationship for the old one, but the deed should deal expressly with accrued rights and liabilities and with the treatment of pre-novation services. Agreeing to an "ab initio" (from the beginning) novation without first reconciling the original consultancy terms with the builder's D&C contract can expose pre-novation services to elevated standards and uninsured liabilities. Queensland's proportionate liability scheme cannot simply be excluded by contract for apportionable claims, but a separately drafted indemnity may still create additional contractual exposure depending on its wording. A builder’s value-engineering demands do not displace the architect’s compliance obligations, professional duties or the need to act within the architect’s authorised scope of services under a novated contract. Day One After Novation: Managing the Builder’s Immediate Value-Engineering Demands You have just signed the novation deed, shifting from the developer’s consultant to a consultant engaged under the D&C builder. The ink is barely dry, and the builder is already pressing for design changes to reduce cost. This is the point at which the architect must establish clear boundaries: what falls within ordinary design development, what requires a formal variation assessment, and what must be refused because it would compromise compliance, exceed scope or undermine the project record. Navigating the Builder’s First Cost-Cutting Directive The first RFI from the new D&C builder usually marks an immediate shift in the project’s commercial reality. The architect’s reporting line has changed from implementing the developer’s design brief to responding to the builder’s delivery objectives. Builders may have legitimate commercial reasons for reviewing specification choices, but the pace and breadth of those requests can force rapid decisions that affect compliance, scope and future liability. In a novated design and construct arrangement, commercial pressure to approve cheaper materials or simplified detailing often becomes the starting point for later defect allegations. The builder controls procurement and programme pressure, but the architect still controls design documentation within the agreed scope. That makes early concessions particularly dangerous if they are undocumented, conditional without follow-up, or allowed to blur the line between compliant design development and builder-led substitution. The moment the first post-novation RFI arrives, the architect’s response strategy begins shaping the project record that may later be examined by a certifier, insurer, regulator or court. It should not be treated as a routine documentation query. Any RFI that seeks a design change should be treated as a proposed variation to the design basis and assessed accordingly. Apply the following protocol to every post-novation RFI that involves a design alteration. Classify the instruction before you respond. Separate each item into three categories: (a) design development that does not alter NCC compliance or the approved development application — these you may action through your ordinary documentation workflow; (b) value-engineering substitutions that alter materials, systems or construction methods but remain code-compliant — these require a formal written variation assessment and your express approval before you proceed; and (c) any instruction that would produce a design the architect reasonably considers non-compliant with the NCC, the Queensland Development Code or the approved basis of assessment — these should be refused in writing, with the relevant compliance reason identified before any further action is taken. Respond in writing in a form that can be independently retained by your practice, not only within the project management platform. The written response should identify the reason for rejection, reference the relevant NCC provision, Queensland Development Code requirement or approval constraint where possible, and state clearly that the instruction is not being accepted for compliance or scope reasons, rather than mere design preference. A status change within a shared platform is rarely enough to create the independent documentary trail needed if the design is later challenged by a certifier, insurer, regulator or claimant. Confirm your authorised scope before answering. Before responding to any RFI requesting a design substitution, check whether the assessment falls within your post-novation scope of services and expertise. If the builder is asking you to approve a product, performance claim or system outside your engagement, record in writing that the assessment sits outside scope and decline to approve it unless and until the engagement is varied appropriately. Scope creep at the RFI stage is a common way architects become exposed to liability for procurement decisions they did not control. Our team at Merlo Law routinely defends QLD and NSW design professionals who have been inadvertently cornered into assuming procurement risks outside their contracted scope. We help architects implement rigid RFI protocols that rapidly identify and shut down uncompensated scope expansion before it hardens into an uninsured liability. Instruct our team to audit your post-novation administration processes and secure your commercial position. Log and segregate every response immediately. Each RFI refusal or variation assessment must be copied to your own file on the day it is issued, tagged with the RFI number, the date received, the date of your response, and a clear notation of whether your response constituted approval, conditional approval or refusal. This document segregation is the pre- and post-novation record your practice will rely on to defend against a defect claim years after practical completion. Warning: Responding to a value-engineering RFI with a conditional approval — for example, approving a product substitution 'subject to structural engineer confirmation' — without obtaining and filing written confirmation that the condition has been satisfied before construction proceeds can shift practical risk back onto your practice. Do not issue conditional approvals unless your engagement includes a documented process for verifying and recording that each stated condition has been satisfied before the substitution is incorporated into the works. Drawing the Line on Compliance, Professional Duties and Scope Warning: Contractual obligations owed to the D&C builder do not relieve the architect of compliance obligations, professional duties or the need to act within the agreed scope of services. Accepting a builder-led instruction that compromises compliance may expose the practice to certification problems, disciplinary issues, uninsured contractual arguments and later defect claims, regardless of the commercial pressure applied under the novated contract. In Queensland, building work and building assessment processes are governed by legislation and by the applicable building assessment provisions, including the NCC. A D&C builder’s value-engineering instruction does not displace the architect’s obligation to act consistently with those requirements or with the architect’s professional obligations. Protecting the practice’s compliance position requires discipline in following the written refusal and record-keeping protocol outlined above for each non-compliant or out-of-scope instruction. For registered architects in Queensland, that approach also aligns with the BOAQ Code of Practice requirements to notify the client in writing of matters preventing the architect from following instructions and to maintain proper records. Documenting Pre-Novation vs Post-Novation Instructions Isolating your pre-novation design decisions from post-novation variations is a critical administrative step that must begin on day one. The developer approved your original schematic design and development application; the builder is now demanding deviations during the construction documentation phase. You must implement a strict document control system that clearly tags which party instructed which variation and when. If a defect claim arises three years after practical completion, this precise paper trail serves as vital evidence. Without it, you risk bearing liability for a compromised, hybrid design that neither fully satisfies the developer's original brief nor meets the required compliance standards. Novation Is Not Assignment: Why the Deed Wording Still Matters The most dangerous misconception at this stage is treating the novation as a simple handover of the client file. A novation is legally different from an assignment: it substitutes a new contractual arrangement in place of the old one. That distinction matters because the deed may also deal with pre-novation services, accrued rights and the extent to which the builder assumes the developer’s position from the novation date or from the beginning. Why Novation is a Substitution, Not a Transfer At law, a novation substitutes one contractual relationship for another. This differs fundamentally from an assignment, which transfers the benefit of rights but does not, by itself, transfer obligations. In practice, the precise effect of the deed still depends on its drafting, particularly in relation to accrued rights and pre-novation services. Under section 190 of the Property Law Act 2023 (Qld) — which replaced the Property Law Act 1974 (Qld) on 1 August 2025 — an assignment of a debt or legal thing in action must be absolute, in writing, and the debtor must be given actual notice of the assignment for the transfer of legal rights to become effectual. The precise statutory mechanics of s 190 establish the mechanism for an absolute assignment of a legal thing in action, sharply distinguishing it from the common law doctrine of novation, which requires tripartite consent to substitute entirely new obligations. This conceptual separation between assignment and novation is well established. Careless use of 'transfer' language in a deed can create avoidable ambiguity about whether rights alone are being assigned or a broader substitution of contractual position is intended. That is one reason the deed should deal expressly with release, accrued rights and the treatment of pre-novation services. The "Ab Initio" Trap: Accepting Liability for Past Developer Decisions Expert insight: Signing an 'ab initio' novation deed without aligning the pre-novation design basis to the builder’s contractual requirements can create significant contractual and insurance risk. Where the deed retrospectively treats the builder as if it had always been the client, the architect may be exposed to allegations measured against a different brief, different risk allocation and, potentially, obligations that fall outside ordinary PI cover. The legal mechanism behind this trap is straightforward. An ab initio novation deed treats the builder as if it had been the client from the commencement of the architect’s engagement. In practical terms, that can expose the architect’s pre-novation work to review against the builder’s contractual framework rather than the original developer brief. If the builder’s terms include fitness for purpose language, uncapped liability or performance obligations exceeding ordinary reasonable skill and care, the architect may face arguments based on standards that were not the basis on which the earlier services were priced, documented or insured. This is structurally different from a prospective novation, also called a switch novation, in which the architect's contractual obligations transfer to the builder only from the novation date forward. Under a prospective deed, the developer retains responsibility for the brief they issued and the instructions they gave prior to novation. The architect's exposure to the builder is limited to post-novation services. The pre-novation design record remains governed by the original consultancy agreement, which aligns with the policy wording under which the architect's PI insurance was written. The PI coverage gap is most acute where the two contractual documents are materially inconsistent. Consider a scenario in which the developer engaged the architect under a standard consultancy agreement requiring reasonable skill and care, but the builder's D&C contract — which the ab initio deed now deems to have always applied — contains a fitness for purpose warranty for the building envelope. The architect's PI policy was issued against the reasonable skill and care standard. The ab initio deed has retrospectively imposed a fitness for purpose obligation. Have you unknowingly assumed retrospective fitness for purpose warranties under an 'ab initio' novation deed? Request an urgent review of your executed contracts today to identify and ring-fence your uninsured exposures. The insurance risk is obvious. Many PI policies contain exclusions for liability assumed under contract beyond the liability that would have attached at common law absent the contract. If the novation deed retrospectively imposes a higher contractual standard, the insurer may dispute cover for that additional exposure. That is precisely why the deed should be reviewed against the policy wording before execution and notified promptly afterwards. Builder-drafted novation deeds often adopt ab initio wording by default. The deed language that triggers this effect includes phrases such as "the Architect is deemed to have been engaged by the Contractor from the date of its original engagement" or "the Contractor steps into the position of the Principal from the commencement of the Architect's services" or any formulation that deems the builder's contract to apply "as if" it had always been in place. Each of these formulations achieves the same result: it applies the builder's elevated standards to design work that was completed before those standards were ever agreed to. If you have already executed an ab initio novation deed without obtaining prospective language, the position is more difficult but not necessarily irretrievable. Three remedial steps should be taken immediately. First, instruct your solicitor to review the executed deed and the original consultancy agreement side by side to identify every material inconsistency between the two — particularly fitness for purpose warranties, unlimited liability provisions, and indemnity obligations that exceed your common law duty of care. Second, notify your PI insurer in writing of the executed deed and its terms without delay, attaching both the deed and a schedule of the specific clauses that extend your liability beyond the original engagement. Late notification is not ideal, but it is usually preferable to silence. Section 40(3) of the Insurance Contracts Act 1984 (Cth) may preserve cover where written notice of facts that might give rise to a claim is given as soon as reasonably practicable and before the policy expires. Third, write to the builder requesting a supplementary deed or side letter that retrospectively limits the novation to prospective effect only. Builders will not always agree, but the request itself creates a contemporaneous record that you did not intend to assume retrospective liability on the elevated terms — a record that may assist both your insurer and your solicitor if a claim eventuates. For architects who have not yet signed, the position is far more straightforward. Before executing any novation deed, instruct your solicitor to identify whether the deed is ab initio or prospective in its effect and to insert express prospective language in its place. The following form of words is commonly used to achieve this result: "This deed takes effect from the Novation Date only. The rights, obligations and liabilities of the parties in respect of services performed and instructions given prior to the Novation Date remain governed by the Original Agreement and are unaffected by this deed." If the builder refuses to accept prospective language, that refusal is itself an important signal about the risk you are being asked to assume, and warrants immediate legal advice before you proceed. Dealing Expressly with Accrued Rights and Pre-Novation Liability If a novation deed does not deal expressly with accrued rights and pre-novation liability, the architect may face uncertainty about whether the original developer retains rights in relation to earlier services. For that reason, the deed should address release and the treatment of pre-novation claims in clear terms. Standard form novations sometimes stay silent on the express release of the architect's liability to the original developer for pre-novation services. Without that drafting discipline, the architect may still face arguments about responsibility for earlier decisions under contract, tort or statute. Addressing the point expressly during the transition from developer engagement to builder engagement is therefore a basic risk-control step. Paragraphs 24, 26 and 34 of the BOAQ Code of Practice operate together to impose specific record-keeping and notification obligations on registered architects in Queensland. Paragraph 24 requires an architect to promptly advise the client in writing of anything that would, or would be likely to, prevent the architect from following the client's instructions. Paragraph 26 requires the architect to maintain thorough records of all correspondence and documents sent and received for at least seven years after completion of services. Read together with paragraph 34 of the Code, which requires an architect to withdraw from services where continuing would require a breach of the Act or the Code, these obligations mean the Board expects architects to create and preserve a clear documentary record where client instructions conflict with professional obligations, the agreed scope or the architect's ability to continue acting consistently with the Code. A failure to do so is not merely a litigation risk — it is a potential disciplinary matter. The Board of Architects of Queensland has the power to take disciplinary action against a registered architect who fails to comply with the Code of Practice, and a pattern of undocumented acquiescence to non-compliant builder instructions could support a finding of unsatisfactory professional conduct, independent of any civil claim. Merlo Law possesses deep, practical experience advising architects facing BOAQ investigations and professional negligence claims born from aggressive D&C environments. We step in to fortify your project records and establish clear boundaries with demanding builders across Queensland and New South Wales. Secure your professional registration and commercial standing by engaging us to manage your high-risk project correspondence. Proportionate Liability in Pre- and Post-Novation Design Defects When a water ingress or structural defect surfaces three years after practical completion, the homeowner won't distinguish between your pre-novation concept and the builder's post-novation variations. At this point, the risk shifts to how liability is divided among the original developer, the D&C builder, and your practice. Queensland's statutory apportionment rules will heavily influence your ultimate financial exposure. Defining Concurrent Wrongdoers Across the Novation Boundary When a design defect claim bridges the pre- and post-novation periods, the architect, the developer, and the builder may all be classified as concurrent wrongdoers if their independent acts contributed to the same loss. A flawed pre-novation developer brief combined with poor post-novation builder execution creates a complex web of shared responsibility. Under section 30 of the Civil Liability Act 2003 (Qld), a concurrent wrongdoer is one of 2 or more persons whose acts or omissions caused, independently of each other, the loss or damage that is the subject of the claim. For construction defect disputes, that concept becomes relevant where loss is said to arise from a combination of design, briefing, coordination, certification or construction decisions across the pre- and post-novation periods. Novation may also have separate insurance and regulatory consequences on residential projects. Where the underlying contract or delivery structure changes materially, home warranty and other insurance arrangements should be checked directly against the applicable policy, statutory requirements and current QBCC guidance rather than assumed to carry across automatically. Section 31: Apportionment Helps, but Only Within an Apportionable Claim In a multi-party design defect claim, the proportionate liability regime can be a significant protection for an architect. If a builder’s later value engineering, procurement choice or construction method materially contributed to the failure, the statutory scheme may limit the architect’s liability to its just and equitable share. However, that protection operates within an apportionable claim itself. It does not automatically dispose of a separate contractual indemnity the architect may have given in the novation deed. Under section 31 of the Civil Liability Act 2003 (Qld), liability in an apportionable claim is limited to the proportion of the loss the court considers just and equitable having regard to the defendant’s responsibility. Under section 28, that regime applies to claims for economic loss or property damage of the relevant kind, not to every claim that may be pleaded in a construction dispute. As defined in section 31, the liability of a defendant who is a concurrent wrongdoer in relation to the claim is limited to an amount reflecting that proportion of the loss or damage claimed that the court considers just and equitable having regard to the extent of the defendant's responsibility. For a proportionate liability Queensland architect, this statutory apportionment is a critical factor in defending an apportionable claim involving a D&C builder — but it must be understood alongside the contractual indemnity analysis discussed below, because the two operate on parallel tracks. Why You Cannot Contract Out of the Apportionment Scheme Warning: D&C builders often seek broad indemnity clauses in novation deeds to shift downstream defect risk onto the architect. Under Queensland law, parties cannot simply contract out of the statutory apportionment regime for apportionable claims. That said, an indemnity may still create a separate contractual avenue of recovery depending on its drafting and the way the claim is framed. This is why broad indemnities should be resisted or narrowed at the deed stage rather than treated as harmless boilerplate. Under section 7(3) of the Civil Liability Act 2003 (Qld), this Act, other than chapter 2, part 2 and chapter 3, does not prevent the parties to a contract from making express provision for their rights, obligations and liabilities under the contract. By explicitly excluding Chapter 2, Part 2 from the freedom to contract out, the statute prohibits parties from overriding the statutory apportionment scheme within an apportionable claim. However, a well-drafted contractual indemnity does not purport to override the apportionment regime; it creates an independent contractual obligation to reimburse the builder for loss. The distinction is critical: the court may apportion liability within the statutory claim, while a separately worded indemnity may still need to be analysed on its own terms. This is why simply relying on the proportionate liability scheme without also negotiating the indemnity wording in the deed is an incomplete risk strategy. Do not let aggressive D&C indemnities strip away your statutory apportionment protections. Instruct our senior construction lawyers to strike out predatory indemnity clauses and negotiate a novation deed that strictly aligns with your PI coverage. Professional Indemnity Insurance: The Notification Dead-zone As the commercial dynamic shifts from developer to builder, your practice's risk profile alters fundamentally. Insurance issues begin as soon as the draft novation deed arrives. Failing to test the deed against current PI cover and notification obligations can leave the practice exposed if the builder later seeks to pass on defect-related losses. PI Insurance Notification Protocols Before Executing the Deed Expert insight: Executing a novation deed often materially changes the architect's risk profile (especially if standard terms are amended by the D&C builder). Failing to implement correct PI insurance notification architect protocols before executing the deed is a common administrative error that can compromise coverage for future design defect claims. Executing a novation deed that materially alters the architect’s risk profile without checking notification and cover implications can compromise the practice’s position on future design defect claims. The notification protocol operates in four stages, each of which must be completed in sequence. Send the proposed deed to your PI broker before you execute it. Do not wait until after the deed is signed to involve your insurer. The moment a draft deed arrives from the builder, forward it to your PI broker with a covering note that specifically identifies every clause extending your liability beyond your common law duty — indemnity clauses, fitness for purpose warranties, unlimited liability provisions, and any clause that removes your right to rely on proportionate liability under the Civil Liability Act 2003 (Qld). The point is to assess whether those specific clauses are likely to fall within the scope of the current policy before the practice becomes bound by them. Obtain a written coverage opinion, not merely a verbal assurance. If your broker advises that a particular indemnity or warranty is likely to be acceptable, ask for that view in writing and keep it on file. A verbal assurance is of limited value if a defect claim arises years after practical completion and the advice later has to be proved. If the insurer identifies clauses that sit outside coverage, you have three options available to you: negotiate the offending clauses out of the deed; request a specific policy endorsement to extend coverage to the new risk; or decline to execute the deed in its current form. The second option is only available if the insurer is prepared to issue the endorsement before you sign. Formally notify the insurer once the deed is executed. Under standard policy conditions, and reinforced by section 40(3) of the Insurance Contracts Act 1984 (Cth), providing written notice to your insurer of facts that may give rise to a future claim before your current policy expires preserves coverage even if the actual claim is made in a later policy period. If the deed or surrounding circumstances disclose facts that might give rise to a claim, consider giving formal written notice to the insurer promptly after execution, attaching the executed deed and identifying the relevant risk features. Disclose the novation at your next renewal. PI insurance in Australia operates on a claims-made and notified basis. The policy that will respond to a defect claim made three years from now is not the policy you hold today — it is the policy in force when the claim is eventually made against you. Every renewal application you lodge between now and that future claim must accurately describe your contractual obligations, including any elevated indemnities you accepted in the novation deed. Failure to disclose a material change in the nature of the practice’s professional activities or contractual risk profile at renewal may create difficulties on a later claim, including non-disclosure issues or reliance on contractual liability exclusions, depending on the policy wording and the facts. How elevated builder indemnities create uninsured exposure. Many PI policies exclude or limit cover for liability assumed under contract to the extent it would not have attached at common law absent the contract. If a novation deed requires the architect to indemnify the builder for losses beyond the architect’s proportionate responsibility or beyond ordinary reasonable skill and care, that may create assumed contractual liability exposure. Insurers commonly scrutinise those clauses closely, and the insurer may contend that the additional liability falls outside cover. The policy wording, not the novation deed, ultimately defines the outer boundary of available cover. Why Broad Deed Indemnities and PI Cover Often Misalign When a D&C builder inserts broad indemnity clauses into a novation deed, the commercial effect — whether or not it is the conscious intention — is to shift the cost of a future defect claim entirely onto the architect. The commercial purpose of these clauses is usually to shift loss arising from design issues onto the architect, but their practical effect depends on their drafting, their interaction with the architect’s ordinary duty of care and the terms of the PI policy. Many PI policies do not respond fully to liability assumed under contract beyond the architect’s ordinary duty to exercise reasonable skill and care. If the novation deed includes broad indemnities untethered to fault, scope or insurance, the practice may assume exposure that is only partly insured or uninsured altogether. While s 7(3) of the Civil Liability Act 2003 (Qld) preserves the statutory apportionment regime for apportionable claims, that does not remove the need to control indemnity drafting at the front end. Protective Strategies for the Novation Deed and D&C Contract You are not obligated to sign a standard-form novation deed that strips your protections, no matter how aggressively the builder pushes. This is the moment to negotiate terms that quarantine your pre-novation advice and strictly limit your liability for builder-led substitutions. The following strategies outline what needs to be in the deed before you proceed. Defining the Post-Novation Scope So Builder Variations Do Not Become Architect Liability Clearly defining the post-novation scope of services within the novation deed ensures you are not held contractually responsible for supervising the builder's unauthorised design deviations. A rigorously drafted scope of services should quarantine the architect’s responsibility to the agreed documentation and review functions, such providing construction detailing or reviewing shop drawings, while expressly excluding any broader role in general superintendency, site supervision or approval of unauthorised substitutions. A rigorously defined post-novation scope of services ensures the architect is only liable for agreed documentation phases and not for unapproved onsite variations executed by the D&C builder. Vague scope definitions often leave the architect exposed to allegations of failing to identify a builder's non-compliant substitution during periodic site visits. Resisting Fitness for Purpose Warranties and Other Elevated Standards D&C builders frequently demand "fitness for purpose" warranties in the novation deed, attempting to force the architect to guarantee that the final design will meet the builder's broad, often undefined, commercial objectives. The point of resisting or qualifying a fitness for purpose clause is to keep the architect’s contractual standard aligned with reasonable skill and care, rather than an outcome guarantee. The enforceability of a fitness for purpose exclusion depends on the specific wording of the novation deed and the architect's ability to resist the builder's drafting demands. As detailed in the PI insurance sections above, standard policies contain a strict exclusion for liability arising from fitness for purpose warranties, meaning acceptance of such an obligation will almost certainly leave the practice personally exposed for any claim arising from that warranty. Where the deed is professionally reviewed before signing, removing or heavily qualifying these warranties should be a primary focus. Essential Clauses for a Safer Novation Express release of accrued rights: Ensure the deed deals clearly with release, accrued rights and responsibility for pre-novation services. Limitation of liability cap: Negotiate a clear monetary cap on your liability, ideally aligned with your PI insurance limits and any applicable professional standards scheme. Proportionate liability preservation: Include a clause expressly confirming that nothing in the deed is intended to exclude the proportionate liability provisions of the Civil Liability Act 2003 (Qld) to the extent they apply. Strict variation mechanism: Define a mandatory written variation process that requires the builder to obtain your formal approval before implementing any design substitution or value engineering on site. PI insurance alignment: Ensure indemnities, warranties and retrospective risk assumptions are reviewed against the practice’s current claims-made PI policy before execution. To ensure your novation deed includes these critical protections, get legal advice from a construction lawyer before signing the builder's proposed terms. Conclusion That first aggressive RFI from the new D&C builder is the moment the theoretical risks of novation become a practical project problem. The deed has been signed, the builder is pressing for thinner slabs and substituted glazing, and the architect is suddenly being asked to trade documentation control for speed and cost savings. By understanding the legal mechanics at play, you can see that novation is not a mere assignment and that the deed wording matters materially to pre-novation exposure, accrued rights and insurance risk. More importantly, the builder’s cost-cutting mandate does not displace the architect’s compliance obligations, professional duties or the need to act within scope. Queensland’s proportionate liability regime may limit exposure within an apportionable claim to the architect’s just and equitable share, but it does not eliminate the need to control deed indemnities and retrospective risk assumptions. That is why deed negotiation remains as important as technical compliance. Before responding to the first value-engineering RFI, secure the baseline. Review the deed to understand how it treats pre-novation services, accrued rights, indemnities and scope. Check PI notification and coverage issues promptly, and implement a disciplined written variation process that records every post-novation builder demand and every refusal, qualification or approval. In practice, those early boundaries are what protect the architect’s compliance position when the defect allegations arrive later. FAQs What is the legal difference between assigning and novating an architect's contract in Queensland? An assignment transfers rights, but does not by itself transfer contractual obligations. Under section 190 of the Property Law Act 2023 (Qld), an absolute assignment of a debt or legal thing in action must be in writing and notified to the debtor. By contrast, a novation substitutes a new contractual arrangement for the old one and requires the consent of all relevant parties. In practice, the legal effect still depends on the deed’s drafting, especially in relation to accrued rights and pre-novation services. Can a D&C builder force a Queensland building designer to approve non-compliant value engineering? No. A D&C builder’s commercial instruction does not relieve an architect or designer of the need to act consistently with the applicable compliance requirements, professional obligations and the agreed scope of services. If a proposed substitution would compromise compliance or falls outside scope, it should be refused or qualified in writing with the reason recorded clearly. How does proportionate liability apply when a design defect claim bridges pre- and post-novation periods? In a multi-party defect claim, the architect, developer and builder may all be concurrent wrongdoers under section 30 of the Civil Liability Act 2003 (Qld) if their separate acts or omissions contributed to the same loss. Under section 31, liability in an apportionable claim is limited to the share the court considers just and equitable, having regard to each party’s responsibility. In construction disputes, that can be important where pre-novation design decisions and post-novation builder changes both contribute to economic loss or property damage. Can a novation deed contract out of Queensland's proportionate liability scheme? Not simply. Parties cannot contract out of the statutory apportionment regime for apportionable claims in Queensland. Section 7 of the Civil Liability Act 2003 (Qld) expressly prohibits parties from overriding Chapter 2, Part 2 by contract. However, a contractual indemnity in the novation deed does not technically override the apportionment scheme — it creates a separate contractual right for the builder to recover loss from the architect. The court may apportion liability within the statutory claim, but a separately drafted indemnity may still require separate contractual analysis. That is why negotiating indemnity clauses carefully, rather than relying solely on the statutory regime, is essential. What is the "ab initio" novation trap for design professionals? The 'ab initio' (from the beginning) trap arises where the novation deed treats the builder as if it had always been the client from the commencement of the architect’s engagement. That can expose pre-novation services to assessment against a different contractual framework, including broader warranties, indemnities or performance obligations than those applying under the original developer engagement. Why is PI insurance notification critical before signing a novation deed? Executing a novation deed can materially alter the architect’s risk profile, particularly where the builder proposes elevated indemnities, retrospective risk assumptions or fitness for purpose obligations. Because PI insurance is written on a claims-made basis, the deed and surrounding facts should be reviewed promptly for notification and coverage implications before and after execution. This guide is for informational purposes only and does not constitute legal advice. For advice tailored to your specific circumstances, please contact Merlo Law

Key Takeaways Leverage Legislative Intent: Use the stated goals of the Housing Availability and Affordability (Planning and Other Legislation Amendment) Act 2024 in current planning submissions to argue your project aligns with urgent state priorities. The "State Facilitated Development" Pathway is Your Precedent: Even before it's fully utilised, the existence of this pathway in law demonstrates the government's intent to fast-track housing. Frame your development as a prime candidate for this type of expedited approval. Proactive Engagement is Non-Negotiable: The new laws signal a shift towards greater state intervention. Developers must now proactively engage with state bodies and align projects with explicit government housing and infrastructure goals to succeed. Social Impact Law is Already in Force: The Planning (Social Impact and Community Benefit) and Other Legislation Amendment Act 2025 commenced in July 2025, introducing mandatory Social Impact Assessments and Community Benefit Agreements into Queensland's planning framework. In its current form, the Act applies to prescribed renewable energy developments — but it establishes a framework the Planning Regulation can expand to other development types. Residential developers should be integrating community benefit principles into their proposals now, as both proactive best practice and a genuine strategic advantage. For Queensland property developers, the primary frustration is universal: valuable projects, meticulously planned and desperately needed, are stalled by planning bottlenecks, council delays, and persistent regulatory uncertainty. In a challenging economic environment, marked by the state's lagging construction productivity and the immense pressure from an ongoing housing crisis, these delays are more than just an inconvenience—they are a direct threat to project viability. However, the recent and proposed legislative changes, particularly the Housing Availability and Affordability (Planning and Other Legislation Amendment) Act 2024 (HAAPOLA), are not just future regulations to be aware of. They are powerful tools that can be used right now. This article is a practical legal toolkit, designed to help developers leverage the clear intent of this new QLD legislation to unlock stalled development approvals, navigate planning disputes, and push critical housing supply projects forward. The Crisis Context: Why QLD's Planning System is Under the Microscope To understand the power of the new reforms, one must first grasp the severity of the crisis that prompted them. The Queensland government's intervention is not a routine adjustment; it's a direct response to a series of compounding failures in housing delivery, construction productivity, and economic development that have reached a critical point. The state's planning system is under the microscope because the old way of doing things is no longer tenable in the face of overwhelming population growth and a severe QLD housing crisis. The Productivity Paradox in Queensland Construction There is a stark and alarming contrast between the construction sector's productivity growth and that of the broader Australian economy. Over the last thirty years, construction productivity has grown by a mere 5%, while other sectors have surged ahead by 65%. More concerning for developers on the ground in Brisbane and across the state is the recent decline of approximately 9% since 2018. This isn't just an abstract statistic; it translates directly into higher costs, extended project timelines, and eroded profit margins, making the viability of new developments precarious. This data paints a clear picture of an industry struggling to keep pace. For developers, this productivity slump manifests in everyday challenges: labour shortages, supply chain disruptions, and the rising cost of materials. These factors, compounded by planning delays, create a perfect storm that threatens to derail even the most well-conceived projects. The legislative intervention, therefore, is an acknowledgment that the market cannot solve this productivity problem alone and that regulatory friction, governed by instruments like the Building Act 1975, must be reduced. Facing mounting holding costs while council drags its feet? Instruct our team to review your stalled application and identify immediate statutory levers to force a timely decision. Falling Critically Short of Housing Targets The existing planning framework has proven incapable of meeting Queensland's housing needs. This is not a matter of opinion but a statistical fact. The state missed its annual housing delivery target by a significant 15,782 homes, a shortfall that directly contributes to the affordability crisis. This failure has been noted nationally, with Queensland ranking low among states for its efforts to address the housing shortage. This public and political failure is the primary catalyst for the government's new, more interventionist approach to planning and development. The housing deficit is the core political and economic driver behind the recent legislative reforms. For developers, this context is crucial. It means that any project that can demonstrably contribute to closing this gap is now aligned with the highest level of state priority. The government has signalled its intent to remove barriers to housing supply, and this provides a powerful new basis for arguing the merits of your development application. The Unrelenting Pressure of Population and Price Growth The crisis is being fuelled by two relentless pressures: explosive population growth and soaring property prices. South-East Queensland's population is projected to increase by a staggering 2.2 million by 2046, creating unprecedented demand for new housing. This future demand is already impacting the current market, with the statewide median house price rising by 12.67% annually, reaching $895,000 in the third quarter of 2025. Illustrative Example: Imagine a medium-sized developer with a 150-unit residential project stuck in council planning for 18 months. During that time, the combination of population pressure and market dynamics has driven up their projected end-unit sale prices, but their holding costs and construction estimates have also soared due to the productivity slump and labour shortages. This developer is in a high-stakes race against time, and the planning delay is the single biggest threat to their project's feasibility. This is the exact scenario the new legislation aims to resolve. Decoding the Legislative Shift: Your New Legal Arsenal The Queensland government's response to the housing crisis is not a single policy but a multi-faceted legislative overhaul. At its heart is the Housing Availability and Affordability (Planning and Other Legislation Amendment) Act 2024 (HAAPOLA), a piece of QLD legislation designed to fundamentally reshape the development approval landscape. For developers, understanding the specific mechanisms within this new legal arsenal is the first step toward leveraging them effectively. This isn't just about future compliance; it's about using these new tools to argue your case today. What is the Housing Availability and Affordability Act (HAAPOLA)? The HAAPOLA, which passed Queensland Parliament in April 2024 and came fully into force in July 2024, is a direct and powerful amendment to the foundational Planning Act 2016. Its primary objective is unambiguous: to urgently expedite housing supply by giving the state government significantly more power to overcome local-level planning blockages and delays. It represents a decisive shift in the balance of power, moving authority away from local councils and towards a centralised, state-driven agenda focused on delivering homes quickly. This Act introduces several key concepts, including the "State facilitated development" pathway, expanded powers for land acquisition for infrastructure, and a clear signal that the government will intervene directly to achieve its housing targets. For developers, HAAPOLA is the most significant change to Queensland planning law in recent years. It provides a new set of rules and, more importantly, a new strategic language for justifying projects that align with the state's urgent priorities. The "State Facilitated Development" Pathway Explained At the core of HAAPOLA is the creation of the "State facilitated development" pathway. This is a new approval route that, for selected projects, can entirely bypass traditional council assessment processes. A project identified for this pathway is effectively fast-tracked by the state. The process begins with the state identifying a development that aligns with its strategic housing priorities, such as delivering affordable housing, increasing density in key transport corridors, or unlocking a large parcel of land for a master-planned community. Once a project is declared a "State facilitated development," the assessment is managed by a state-appointed authority, dramatically reducing assessment timeframes from years to months. The benefits for a developer are immense: certainty, speed, and the removal of often parochial local political considerations from the decision-making process. While not every project will qualify, the very existence of this pathway is a powerful tool for all developers, demonstrating the government's willingness to intervene decisively. At Merlo Law, we have seen firsthand how citing the intent behind the 'State facilitated development' pathway can aggressively shift the balance of power in negotiations with local authorities across Queensland and New South Wales. Our senior legal team routinely leverages these macro-level legislative tools to break complex deadlocks, moving critical commercial and residential projects from the "too hard" basket back onto active approval agendas. Understanding New State Powers for Land Acquisition To support the delivery of new housing, HAAPOLA also grants the state expanded powers to acquire land for critical infrastructure. This is designed to solve the classic "chicken and egg" problem where development is stalled because essential services like water, sewerage, and roads are not in place. These new powers build upon the existing framework of the Economic Development Act 2012, giving the government a more agile tool to compulsorily acquire land needed to unlock major residential projects. Warning: While these new powers are designed to unlock development, they also represent a significant expansion of state authority. Developers must be aware that this can work both for and against them. Having a project that relies on infrastructure the state deems non-critical could put you at a disadvantage. Legal advice is crucial to understand how your project fits within the state's infrastructure priorities. An expert building and construction lawyer can provide this clarity. The Social Impact and Community Benefit Act 2025: Already Law, and Worth Watching The Planning (Social Impact and Community Benefit) and Other Legislation Amendment Act 2025, which passed Queensland Parliament on 25 June 2025 and commenced on 18 July 2025, represents the "other side of the coin" to HAAPOLA's pro-development push. While HAAPOLA focuses on speed and supply, this Act focuses on quality and community acceptance. In its current prescribed form, the Act's mandatory requirements — a Social Impact Assessment (SIA) and a formal Community Benefit Agreement (CBA) negotiated with the relevant local government — apply to renewable energy developments: wind farms, large-scale solar farms, and battery storage facilities. Critically, however, the Act deliberately establishes a flexible framework. The Planning Regulation carries the power to prescribe additional development types in the future, and the intent of the legislation is clear — formal, structured community engagement is becoming an embedded feature of Queensland's planning system, not an optional extra. For residential and commercial property developers, this is not simply a renewable energy story to file away. It is a strong signal of the direction Queensland's planning framework is heading. Developers who proactively adopt social impact thinking and community benefit principles in their residential proposals now are positioning themselves ahead of potential regulatory expansion — and demonstrating the kind of sophistication that planning authorities and community stakeholders increasingly recognise and reward. The Strategic Toolkit: Arguing Your Development's Case Today Understanding the new legislation is only the first step. The real advantage lies in actively using its principles and intent as legal leverage in your current and future planning submissions. This toolkit provides actionable strategies to transform the HAAPOLA from a piece of background reading into a powerful tool to argue your case, challenge delays, and unlock development approvals in the here and now. It's about shifting the narrative from one of compliance to one of partnership in solving a state-declared crisis. Citing Legislative Intent in Your Planning Submissions The most direct way to use the new laws is to embed their explicit purpose directly into your development application and supporting arguments. The process begins by identifying the purpose provisions of the Planning Act 2016 — the foundational legislation that the HAAPOLA directly amends. Section 5(2)(f) of the Planning Act states that advancing the Act's purpose includes "providing for housing choice, diversity and affordability." The HAAPOLA was explicitly designed to give effect to that purpose, and its Explanatory Notes and Second Reading Speech make clear the legislation's intent to facilitate the timely delivery of housing and address the affordability crisis. The next step is to draft submission arguments that directly quote this legislative language. Instead of simply stating that your project provides new apartments, you argue that it "directly responds to the legislative imperative of the HAAPOLA by facilitating the timely delivery of 200 dwellings." You then connect these quotes to specific, tangible features of your development. For example, if your project includes a mix of one, two, and three-bedroom units, you frame this as "fulfilling the Act's stated goal of increasing housing diversity to meet the needs of a growing Queensland." This technique transforms your planning submissions from a technical document into a compelling legal and political argument, proving its alignment with the state's declared mission. How to Frame Your Project as a Solution to the Housing Shortfall A powerful strategy is to use the government's own data on the housing shortfall as a central justification for your project. Your application should explicitly reference the official housing deficit statistics, noting the state fell short by 15,782 homes. This immediately frames your project not as a commercial venture, but as a crucial part of the solution to a documented public problem. The key is to quantify your project's specific contribution. Don't just say you are adding to supply; calculate and state exactly what your impact is. For instance, an argument could be structured as: "This 200-unit development directly addresses a quantifiable portion of the local area's documented housing need, delivering essential supply that the current planning framework has failed to provide." This puts the planning authority in the difficult position of having to justify why they would block a project that helps solve a problem they are under pressure to fix. Council planning departments are operating under the old rules, but the state government has fired a starting gun on a new race. In your submissions, you must position the council's delay not as a procedural issue, but as an active barrier to achieving a legislated, urgent state government priority. This reframes the entire conversation and puts the onus on them to justify why they are obstructing a clear government mandate. Stop accepting unreasonable council delays as the unavoidable cost of doing business. Request an urgent strategic review of your project to secure your commercial position and compel local planning authorities to act. Leveraging the "State Facilitated Development" Concept in Disputes Even if your project is not formally designated for the "State Facilitated Development" pathway, the pathway's very existence is a powerful negotiating tool in planning disputes. The core of this argument is that the pathway proves the government's willingness to override local councils for projects of state significance. You can therefore argue that your project, while being assessed by the council, embodies the principles of a State Facilitated Development and should be treated with similar urgency and priority. In a planning dispute, whether in negotiation or before a tribunal, you can contend that a refusal or unreasonable delay is contrary to the demonstrated intent of the Queensland Parliament. This sophisticated legal argument suggests that the local authority is acting out of step with clear state policy. It elevates the dispute from a technical disagreement over a planning scheme to a matter of alignment with state objectives. When facing a complex dispute where these principles are in play, it is the right time to Speak with a planning dispute lawyer. Negotiating Community Benefit Agreements Proactively Imagine a developer whose multi-residential project is facing strong, organised local opposition based on concerns about its impact on community amenity. Instead of digging in for a protracted fight, the developer proactively applies the community benefit principles now embedded in Queensland's planning framework through the 2025 Act. They commission a brief social impact statement and propose a formal Community Benefit Agreement, offering to fund a significant upgrade to a nearby local park and playground. This single move neutralises the most vocal opposition, gains the support of the local councillor, and reframes the project as a net asset for the community. The path to approval is smoothed long before the law makes such agreements mandatory. This scenario illustrates a powerful proactive strategy. By proactively adopting social impact and community benefit principles — already a mandatory feature of Queensland's planning framework for certain development types — developers can turn an emerging expectation into a genuine strategic advantage today. It builds goodwill, reduces the likelihood of costly objections and delays, and demonstrates a level of sophistication that planning authorities appreciate. Successfully managing these negotiations is a key part of handling complex commercial legal matters. Navigating Common Roadblocks in the Current System Even with a powerful new toolkit, developers will still encounter familiar roadblocks: entrenched legal disputes, council delays, and jurisdictional confusion between courts and tribunals. The key is to apply the new legislative principles to these old problems, creating fresh arguments and new pathways to resolution. Understanding the roles of the Planning and Environment Court, the Queensland Civil and Administrative Tribunal (QCAT), and regulatory bodies like the Queensland Building and Construction Commission (QBCC) is essential for navigating building disputes and planning challenges effectively. What Happens When You're Stuck in the Planning and Environment Court? The Planning and Environment Court is the primary venue for resolving major development disputes in Queensland. For developers already embroiled in a lengthy and expensive court battle, the new legislative landscape offers a new angle of attack. The core legal arguments in your case can be bolstered by introducing the clear legislative intent of the HAAPOLA. This is effective even if your dispute began long before the Act commenced. Your legal team can argue that the court, in making its decision, should give significant weight to the state's recently clarified, urgent priority to increase housing supply. This reframes the context of the dispute. A council's refusal, which may have seemed reasonable under the old framework, can be argued to be contrary to public interest and state policy under the new one. This approach requires a deep understanding of how the court interprets its role within the broader framework of planning laws and the Building Act 1975. Navigating the Planning and Environment Court demands more than just textbook legal knowledge; it requires tactical litigation experience grounded in immediate commercial realities. Merlo Law’s construction and planning specialists regularly translate these complex legislative shifts into hard-hitting court submissions, consistently forcing planning authorities across QLD and NSW to legally justify their refusals against the weight of state-mandated priorities. Dealing with Council Delays and "Deemed Refusals" One of the most common and frustrating scenarios for a developer is the "deemed refusal," where a local council fails to make a decision on an application within the statutory timeframe, effectively refusing it without reason. This often forces the developer to initiate a costly appeal process, typically to the Planning and Environment Court. The HAAPOLA's intense focus on speed and housing delivery provides a powerful new argument in these specific cases. You can now contend that the council's delay was not merely a procedural lapse but an unreasonable action that actively obstructs the achievement of critical state objectives. This strengthens your case that the appeal should be upheld and the development approved, putting the onus on the council to defend its inaction in the face of a housing crisis. For developers navigating the complexities of tribunal processes, our guide to QCAT in Queensland offers valuable insights. The Role of QCAT in Minor Planning Disputes While the Planning and Environment Court handles major development appeals, it's important to understand the specific jurisdiction of QCAT in certain planning and building matters. QCAT's role is often misunderstood. It does not typically hear appeals against a council's refusal of a development application. However, it does handle disputes related to building and construction matters, including directions from the QBCC, and certain decisions made under specific legislation that fall outside the primary planning acts. For example, a dispute over a certifier's decision or a matter concerning compliance with building codes might end up in QCAT. Its process is typically faster and less formal than the courts. For developers, knowing which disputes belong in which jurisdiction is critical to an efficient and cost-effective legal strategy. Effectively preparing a case for QCAT requires an understanding of the standards and regulations set by bodies like the QBCC, which operates under the Queensland Building and Construction Commission Act 1991. Preparing Your Development Pipeline for the New Regulatory Landscape The legislative reforms demand more than just reactive tactics; they require a fundamental shift in long-term strategic planning. Proactive developers are now auditing their entire project pipeline, re-evaluating their legal partnerships, and changing how they engage with government. This is about future-proofing your business by ensuring your project management and risk management frameworks are aligned with the new reality of state-led development priorities and construction contracts. Auditing Your Project Pipeline for State Priority Alignment The first strategic step is to conduct a comprehensive review of your entire portfolio of future projects. This audit should assess each project against the explicit goals of the HAAPOLA. Ask critical questions: Is the project located in a priority development area? Does it increase housing density near public transport? Does it offer a diverse range of housing types, including affordable options? Based on this assessment, you can create a priority ranking for your pipeline. Projects that are highly aligned with the new state agenda should be fast-tracked, as they now have the greatest chance of a smooth and rapid approval process. Projects that are less aligned may need to be re-scoped or placed on hold. This proactive self-assessment ensures you are deploying capital and resources toward developments most likely to succeed in the new regulatory environment. This is a crucial step in managing long-term risk and protecting your payment rights in construction on viable projects. Why Your Legal Team Must Understand Both Development and Policy The era of treating planning law as a purely administrative, box-ticking process is over. The new legislation is deeply political and driven by high-level economic and social policy. A successful legal partner must now be able to craft arguments that speak to economic policy, housing targets, and legislative intent, not just the technical codes within a local planning scheme. Your legal team needs to be adept at connecting the micro-details of your development to the macro-priorities of the state government. They must be able to argue not just that your project complies with the rules, but that it actively serves the public interest as defined by the government of the day. This requires a unique blend of legal acumen, policy analysis, and strategic communication. We are seeing a fundamental shift. Previously, a planning lawyer's job was to interpret the existing rules. Now, their job is to interpret the direction of the government and use that to shape how the rules are applied. It's a move from technical compliance to strategic advocacy. Your legal team needs to be as comfortable reading a parliamentary report as they are a planning scheme. Building a Stronger Relationship with State Development Under the new laws, the Department of State Development, Infrastructure, Local Government and Planning is a more critical stakeholder for developers than ever before. Success is no longer solely dependent on your relationship with the local council. It is vital to understand the Department's strategic documents, infrastructure plans, and priority growth corridors. Proactive, informal engagement with state-level bodies can provide crucial intelligence on emerging priorities and policy shifts. It allows you to position your company not merely as an applicant seeking approval, but as a capable partner in helping the government solve the housing crisis. Building this reputation can pay significant dividends, potentially opening doors to being considered for State Facilitated Development pathways or gaining state support in disputes with local authorities. Further insights into legal and policy trends can be found in our publications. Conclusion: The Proactive Developer's Advantage The 2024 and 2025 legislative changes in Queensland are not just another layer of regulation; they are a clear signal of a new era in property development. The balance of power has shifted decisively towards the state, and the government has armed itself with the tools to intervene directly in the planning process to achieve its housing goals. For developers, this represents both a challenge and a significant opportunity. Success is no longer just about technical compliance with a local planning scheme; it's about strategic alignment with urgent state priorities. The laws provide immediate and powerful leverage for developers who are willing to be proactive, assertive, and strategic. By citing legislative intent, framing projects as solutions to the housing crisis, and preparing for future social benefit requirements, you can turn this regulatory shift into a decisive commercial advantage. The proactive developer who understands this new landscape will unlock stalled projects, navigate disputes more effectively, and ultimately, build more homes. The time to act is now. Review your current submissions, audit your future pipeline, and seek expert counsel to ensure you are positioned to thrive in this new environment. FAQs Can I use the HAAPOLA to challenge a planning decision that was made before the Act's key provisions commenced in mid-2024? Yes, potentially. While the Act is not retrospective, its principles can be used in current legal proceedings, such as an appeal in the Planning and Environment Court. You can argue that the court should consider the Act's clear statement of state interest regarding housing supply when reviewing the "public interest" element of the original decision. It provides a new, compelling context for your case. What specific types of projects are most likely to be chosen for the "State Facilitated Development" pathway? While specific criteria are still being refined, projects that deliver significant housing numbers, include a substantial affordable or social housing component, are located in priority growth corridors identified by the state, or unlock critical infrastructure are prime candidates. Large-scale, master-planned communities and high-density transit-oriented developments are also likely to be favoured. How does this new legislation affect my relationship with the local council? Your relationship with the local council remains important, but it is no longer the only one that matters. The new laws effectively make the state government a key stakeholder in almost every significant residential development. You must now engage on two fronts, ensuring your project not only meets local planning scheme requirements but also aligns with the state's broader strategic objectives. What is a "Community Benefit Agreement" and how can I prepare for it? A Community Benefit Agreement is a formal, often legally binding, agreement between a developer and a community or council that outlines the specific benefits the development will provide. This can include funding for local parks, contributions to community facilities, local employment targets, or public art installations. To prepare, start incorporating a "community benefit" section into your development proposals now. Engage with local community groups early to understand their needs and proactively offer solutions. Do these changes affect my obligations under the QBCC Act? These planning law changes do not directly alter your obligations regarding licensing, building standards, or home warranty insurance under the Queensland Building and Construction Commission Act 1991. However, by streamlining approvals, the new laws may get you to the construction phase faster, at which point all QBCC regulations and compliance requirements will apply as usual. Navigating QBCC regulations remains a critical part of the process. If my project is delayed by a council, what is the first legal step I should take? The first step is to get formal legal advice to confirm your procedural rights. If the delay has resulted in a "deemed refusal," your primary remedy is typically to file an appeal in the Planning and Environment Court. Your legal submission in that appeal should now lean heavily on the arguments outlined in this article, citing the HAAPOLA's intent to demonstrate that the council's delay is contrary to state policy and the public interest. This guide is for informational purposes only and does not constitute legal advice. For advice tailored to your specific circumstances, please contact Merlo Law

The Queensland Government has passed further amendments to the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (BIF Act). The BIF Act provides sweeping changes to existing construction legislation in Queensland. BE WARNED - No second chances. Under the new law a disputed payment claim may be immediately enforced in a Court when no valid payment schedule has been provided in response to it. Claimants will not need to provide respondents with prior notice and a second chance to provide a payment schedule as under the 2004 BCIPA as amended in 2014. All possible times at which payment claims may be served should be identified and checked regularly. Call Merlo Law today to understand these and other wide sweeping and serious changes to the law governing Construction – before its to late for your project or business. This publication considers legal and technical issues in a general way. It is not intended to be legal advice. Any legal advice is qualified on the basis that the reader should immediately confirm the information relied upon with Merlo Law. We look forward to being of assistance.

Did you know that self-represented litigants typically are not able to claim for their costs, even if successful, except for disbursements such as court filing fees subpoena and expert witness appearances? That’s a real problem, for several reasons: Firstly you will not be an expert and likely to get the best result yourself. Court rules and procedures are complex and often difficult even for experienced practitioners. There is a high probability you will not be successful Don’t forget the adage he who has himself for his own lawyer is awful – that statement is for very good reason, we are just too close to our own matters to see it clearly. You may not like to believe this but you will always get better service from a completely objective lawyer. Time you spend  Trying to represent yourself, will only take away from your ability to earn your regular income, or care for your loved ones. The seminal precedent The Chorley Exception, first decided in London Scottish Benefit Society v Chorley (1884) 13 QBD 872, held that where a self-represented litigant is in fact a qualified solicitor, they are entitled to claim professional costs for legal work they performed themselves. The same does not apply for regular self litigants in ordinary circumstances. That  proposition holds because solicitor costs are quantifiable by courts according to scale costs, whereas costs claimed by a layperson for representing themselves for time spent performing legal work are amorphous and insusceptible to precise calculation. Recent Australian cases In Pentelow v Bell Lawyers Pty Ltd [2018] NSWCA 150, the New South Wales Court of Appeal considered a claim for costs by a barrister and the Chorley Exception was held to extend to barristers as well. Once previously, the High Court in Cachia v Hanes [1994] HCA 14 had cast doubt on the exception, but the exception remained. Other appeal courts have held that the exception applies and that only the High Court could alter this: Waller v Freehills [2009] FCAFC 89. The High Court decision in Cachia v Hanes was recently considered on Special Leave in Coshott v Spencer & Ors [2018] HCATrans 81 (10 May 2018). The current position of the law The exception remains. Talk to Merlo Law today to assist you with your matter. This publication considers legal and technical issues in a general way. It is not intended to be legal advice. Any legal advice is qualified on the basis that the reader should immediately confirm the information relied upon with Merlo Law. We look forward to being of assistance.

As a response to the concerns about combustible cladding, the Queensland Government passed the Building and Construction Legislation (Non-Conforming Building Products -Chain of Responsibility and Other Matters) Amendment Act (NCBP Act) 2017 on 24 August. On 1 October 2018, the Building and other Legislation (Cladding) Amendment Regulation 2018 came into effect compelling building owners to complete the combustible cladding checklist to determine the type of material used on their building and whether any further assessment is required. The Queensland Government has announced new legislation to increase accountability and disciplinary action for the supply and use of non-conforming building products. What are non-conforming building products? Non-Conforming Building Products (NCBPs) are building products and materials that are not safe, not of acceptable quality, do not meet Australian standards, or are otherwise not fit for their intended purpose.  You cannot rely on product technical material. In some cases,  product technical material may contain false or misleading statements. This Australia-wide issue is very complex, and affects a plethora of industries including manufacturing, importation, retail and construction.  The NCBP Act applies to individuals or corporations who are "persons in the chain of responsibility" for building products, and this includes designers, manufacturers, importers or suppliers and installers.  The NCBP Act casts an important onus on senior executives deemed to be 'controlling minds' in the chain of responsibility. The NCBP Act puts a duty at each stage of the building product supply chain to: ensure that NCBP’s are not used; pass information about the suitability and use of a building product on to the next stage of the chain; notify the Queensland Building and Construction Commission (QBCC) of suspected non-conforming building products. Policed by QBCC The duty will be policed by the QBCC, which the NCBP Act has given powers to enter, inspect, examine and test building products.  The QBCC will be able to impose very heavy fines and other consequences for breaches, including cancellation of building licences and stop-work or recall orders . New duties of care and new offences WARNING - Two key changes in the NCPB Act and Regulations are the imposition of duties on building supply chain participants and the creation of new offences. The imposition of new duties There is now one primary duty, applicable to all participants in the supply chain, and a range of additional duties applying to specific to particular roles within the supply chain. Primary duty The primary duty is that each person involved in the chain of responsibility must ensure, insofar as reasonably practicable, that a product is not a NCBP. The scope of the primary duty is dependent upon where that duty falls in terms of the stage of the supply chain. Do not assume risks ignorance is no excuse in the eyes of the law and the QBCC is here to set punitive examples to illuminate illegal conduct.  Can your business afford  $130,550.00 in fines? Merlo Law is here to help you avoid serious criminal and punitive consequences in running your business. Get Advice now or pay the price later and be held out as a public example by the QBCC. Additional duties Additional duties now operate in conjunction with the overarching primary duty. The additional duties will provide further guidance as to how a person’s primary duty is to be discharged. These duties create the need for significant changes in your business – engage the best, engage John Merlo today to assist your business before you get caught by the new laws and regulations. New Offences The penalty unit value in Queensland is $130.55 (current from 1 July 2018). The amending legislation introduces a number of new offences into the QBCC Act.  These include: An offence, carrying a maximum of 1000 penalty points $130,550.00 - if a breach of any of the duties discussed occur; an offence, carrying a maximum of 1000 penalty points $130,550.00 - if representations are made about the intended use of the product does not comply with requirements for representations prescribed by regulations; and an offence, carrying a maximum of 50 penalty points - if a person in the chain of responsibility has a reasonable suspicion or knowledge that a building product is a non-conforming building product for an intended use and does not give notice to the Commission. Notifiable incidents An additional duty is imposed on all persons in the chain of responsibility to notify the QBCC of any ‘notifiable incident’.  Notifiable incidents include death, serious injury, or an incident that exposes any person to serious injury or illness. Breaching this reporting obligation carries a maximum penalty of 100 penalty units. This publication considers legal and technical issues in a general way. It is not intended to be legal advice. Any legal advice is qualified on the basis that the reader should immediately confirm the information relied upon with Merlo Law. We look forward to being of assistance.

Did you know work health and safety law in Queensland are a serious matter and now impose criminal liability for certain failures. Don’t ‘wait and see’ if you are investigated or fined… the time you take to respond could be the difference between, at best a small fine or a large fine, or at worst, a fine and jail time. Have you ever heard the expression “you never get a second chance to make a first impression”? I can help you make sure you get through what’s occurred the best way possible. Let’s look at the law and where you stand. A breach to work health and safety law in Queensland occurs when: A person conducting a business or undertaking (PCBU), or its senior officers' conduct, negligently causes the injury or death of a worker; or an action is taken that places any person at risk of injury, illness or death; steps are not taken to avoid a risk from occurring; and there is a failure to comply with regulatory requirements. Categories of offences The Work Health & Safety Act (WHS) sets up a ‘health and safety duty of care’. There are 4 categories of offences for failing to comply with a health and safety duty under the WHS Act depending on the degree of seriousness or liability involved. Industrial manslaughter The highest penalty under the WHS Act is for industrial manslaughter where a PCBU, or a senior officer, negligently causes the death of a worker. If a PCBU, or senior officer, commits the offence of industrial manslaughter, a maximum penalty of 20 years imprisonment for an individual or $10 million for a body corporate applies . Category 1 offence The next highest penalty possible under either the WHS Act or the Electrical Safety Act is for a category 1 offence. These offences occur where it is found that a duty holder recklessly exposed and so endangered a person to risk of death or serious injury. These offences will be prosecuted in the District Court. Corporations face up to to $3 million in fines. A person conducting a business or undertaking (PCBU) or an officer will face up to $600,000 in fines and 5 years jail time. A worker faces up to $300,000 in fines and 5 years time. Category 2 offence A category 2 offence is a failure to comply with a health and safety duty or electrical safety duty which exposes a person to a risk of death, serious injury or illness. Offences will be prosecuted in the Magistrates Court. Corporations face up to $1.5 million in fines. An Individual as a PCBU or an officer face fines of up to $300,000 A worker face fines of up to $150,000. Category 3 Offences A category 3 offence is a failure to comply with a health and safety duty or electrical safety duty. Offences will be prosecuted in the Magistrates Court. Corporations face up to $500,000 in fines. An Individual as a PCBU or an officer faces up to $100,000 in fines. A worker faces up to $50,000 in fines. On-the-spot fines An infringement notice, is an alternative to prosecuting alleged offenders directly through court. On-the-spot fines may be issued for work health and safety offences prescribed in the State Penalties Enforcement Regulation 2014. Both PCBUs and workers can be issued with on-the-spot fines. Examples of offences which can be issued with a fine include  failure to record a notifiable incident; failure to allow a health and safety representative to exercise powers or functions; failure to use/wear personal protective equipment (PPE) provided by PCBU in accordance with reasonable instruction information or training given by PCBU; allowing persons to carry out high risk work without noting written evidence that the worker has the relevant high risk work licence; failure to test electrical work; and failure to ensure electrical equipment was de-energised before carrying out electrical work. This publication considers legal and technical issues in a general way. It is not intended to be legal advice. Any legal advice is qualified on the basis that the reader should immediately confirm the information relied upon with Merlo Law. We look forward to being of assistance.

Did you know the Queensland Government has passed further amendments to the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (BIF Act) in an attempt to clarify how project bank accounts (PBAs) are to operate. Get your hand out of the cookie jar The amendments aim to further restrict a head contractor’s ability to access amounts in PBAs. Previously as drafted, Head contractors were able to contort the intent of the laws by relying on the fact that if an amount in the PBA was not due and owing, it was fair game. Head contractors will not be able to withdraw amounts from the general trust account in circumstances where: The head contractor is “liable to pay” any subcontractor amounts, which are amounts certified, stated in a payment schedule or assessed as payable (e.g. by the superintendent); Disputed fund account The money is tied up – possibly for years. Head contractors will not be able to withdraw any amount from the disputed funds account until after the conclusion of the period in which an appeal may be commenced or otherwise the end of the appeals process.  Once the laws are in place this will mean head contractor may be required to hold an amount in the disputed funds account for conceivably years – e.g. after the adjudication process, after application to set aside the adjudication decision, after any appeal, etc.). Further, the amendments provide that: Head contractors will be prohibited from withdrawing any amount from the retention trust account until after the expiry of the defects liability period, unless the withdrawal is: to make payment to the relevant subcontractor; by order of a court; or to make payment to another subcontractor engaged to correct the defects in relation to the first subcontractor’s defective work, subject  to the head contractor having an entitlement to pay itself the amount under the original subcontract to which that retention amount relates. Payment schedules – if you don’t have a good reason right now, you don’t have a good reason later Be warned – the proposed amendments stipulate that the time respondents have to issue a payment schedule will be reduced to the earlier of the period stated under the contract; or 15 business days after the payment claim is given to the respondent – this was previously 25 business days in the last amendments. Get help now The war in these areas is continually being amended and developed as the Commission trials and rolls out its provisions. Penalties are strict. In the midst of COVID19 crisis, You can expect to see rapid regulation in strict terms from a Commission which has already made it very clear that it intends to ‘take a broom to the construction industry’.   Don’t take a risk on incurring heavy penalties and loss of license. Get help immediately and contact Merlo Law.   This publication considers legal and technical issues in a general way. It is not intended to be legal advice. Any legal advice is qualified on the basis that the reader should immediately confirm the information relied upon with Merlo Law. We look forward to being of assistance.